Professional Documents
Culture Documents
Draft Review
Literature review of
life cycle costing
(LCC) and life cycle
assessment (LCA)
Table of Contents
Foreword ........................................................................................................1
Glossary of Terms and Symbols ..................................................................2
1
Introduction ...................................................................................................4
4
4.1
4.2
4.3
4.4
4.5
5
5.1
5.2
5.3
5.4
5.5
6
6.1
6.2
6.3
6.4
8
8.1
8.2
8.3
9
9.1
9.2
9.3
10
10.1
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10.2
10.3
10.4
10.5
11
11.1
11.2
11.3
11.4
11.5
12
12.1
12.2
12.3
13
13.1
13.2
13.3
Life cycle costing (LCC) and life cycle assessment (LCA) IT tools and
methods .......................................................................................................67
LCC tools without LCA...................................................................................67
LCC methods with LCA .................................................................................68
LCA Methods and Tools ................................................................................68
14
15
16
References ...................................................................................................72
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Foreword
The literature review in this document relating to Life Cycle Costing (LCC) and Life Cycle
Assessments (LCA) in construction has been assembled as part of the research for the project
Life-cycle costing (LCC) as a contribution to sustainable construction towards a common
methodology, commissioned by the EU, in January 2006.
An extensive body of literature exists on both subjects as well as wide-ranging literature
reviews were carried out in the past as part of other research projects.
The latest available reviews date to 2002-2003. In order not to duplicate information which
is already publicly available and well known, we have decided to concentrate on
developments within the last 3-4 years. Obviously if the documents we have to refer to date
older than 2002, we shall still list them, but without the in-depth analysis.
The existing literature review documents we have referred to are:
l Doctoral thesis of Eva Sterner April 2002 Green procurement of buildings;
estimation of environmental impact and life-cycle cost at the Lulea University of
Technology, Sweden URL: http://epubl.ltu.se/1402-1544/2002/09/LTU-DT-0209SE.pdf.
l Whole life costing in construction a state of the art review research paper 4(18),
April 2003 by Mohammed Kishk, Assem Al-Hajj and Robert Pollock (The Robert
Gordon University) and Ghassan Aouad, Nick Bakis and Ming Sun (University of
Salford) URL: http://www.rics.org/NR/rdonlyres/E4E31B2A-BC71-4C79-A73C8280EF283EB2/0/whole_life_costing_in_construction_20030401.pdf
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Inflation/Deflation
Life Cycle
Period of Analysis
Risk
Risk Analysis
Sensitivity analysis
Sustainability
Sustainable Construction The use of design and construction methods and materials that are
resource efficient and that will not compromise the health of the
environment or the associated health of the building occupants,
builders, the general public or future generations
Sustainable Development Development that meets the needs of the present without
compromising the ability of future generations to meet their own
needs.
Uncertainty
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Symbols
AC
Annual Cost
AEV
AIRR
BCR
DPP
EAC
EC
European Commission
ESL
EU
European Union
IRR
ISO
LCA
LCIA
LCC
LHS
MCS
NB
Net Benefits
NPC
NPV
NS
Net Savings
PB
Payback
PV
Present Value
RSL
SA
Sensitivity Analysis
SIR
WLC
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Introduction
Life cycle costing (LCC) is a technique to estimate the total cost of ownership (OGC, 2003).
In the building and construction industry, LCC is applied to quantifying costs of whole
buildings, systems, and/or building components and materials. The technique can assist
decision-making for building investment projects (Flanagan et al., 1989). A LCC process
usually includes steps such as planning of LCC analysis (e.g. definition of objectives),
selection and development of LCC model (e.g. designing cost breakdown structure,
identifying data sources and uncertainties), application of LCC model, and documentation
and review of LCC results (NSW Treasury, 2004). There have been extensive research and
reports on LCC. Nevertheless, LCC is not commonly applied in Europe.
There have been signs that certain human activities such as industrialisation and urbanisation
have caused irrecoverable environmental impacts to the earth. Thus, sustainability
development, which aims to ensure that the environment is sustainable for future generations
in the dimensions of social, environmental and economic, has been advocated in recent
years. Due to the environmental load imposed by the construction industry, there has been
an urge to make the construction supply chain more sustainable (CIB, 1999). Research work
has been actively undertaken to develop methods and tools to assess the sustainability of a
building, mainly in the environmental aspect. Life cycle assessment (LCA) has been
adopted as the technique to assess the environmental performance of a building throughout
its life cycle, and ISO standards have been established to provide a common framework.
The purpose of this report is to provide a critical review on both LCC and LCA. Their
framework, implementation, available methods and tools, and barriers are discussed. Recent
academic research work that attempts to integrate both cost and environmental performance
of a building is also reviewed.
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4.1
ISO 15686-5: Building and constructed assets service life planning (draft)
ISO/DIS 15686-5 (ISO, 2006) is currently in preparation. The review was conducted on the
draft version. This part of ISO 15686 aims at providing the procedures for performing LCC
analyses of building and constructed assets and their parts, including cost or cash flows,
arising from acquisition through operation to disposal. The abundant information in it is
foreseen as a major reference for LCC in construction. Its main content covers principles of
life cycle costing, instructions for LCC appraisal of options/alternatives, appraisal of life
cycle costs in investment options, decision variables, uncertainty and risk, and worked
examples.
The key objectives of this part of ISO 15686 are as follows:
l Establish clear terminology and a common methodology for life cycle costing (LCC).
l Enable the practical use of LCC so that it becomes widely used in the construction
industry.
l Enable the application of LCC techniques and methodology for a wide range of
procurement methods.
l Help to improve decision making and evaluation processes, at relevant stages of any
project.
l Address concerns over uncertainties and risks, to improve the confidence in LCC
forecasting.
l Make the LCC assessments and the underlying assumptions more transparent and robust.
l Set out the guiding principles, instructions, and definitions for forms of LCC analysis and
reporting.
l Providing the framework for consistent life cycle cost predictions and performance
assessment, which will facilitate more robust levels of comparative analysis and cost
benchmarking.
l Provide a common basis for setting life cycle cost targets during design and construction,
against which actual cost performance can be tracked and assessed over the asset life
span.
l Clarify the differences between whole life costing (WLC) and life cycle costing; when to
undertake it, to what level and what costs and should be considered.
l Provide a generic menu of costs for WLC/LCC compatible with and customisable for
specific international cost codes and data structure conventions.
l Help unlock the real value of effectively doing LCC in construction using service life
planning.
ISO 15686-5 intends to distinguish between WLC and LCC. Life cycle cost is viewed as
part of whole life cost. Figure 4.1 indicates the cost components of LCC and WLC.
Nevertheless, ISO 15686-5 attempts to create a useable cost structure for assessing LCC in
construction, which could be customised and aligned to specific cost coding conventions to
suit national application of LCC analysis. For example, acquisition and disposal cost
components could be added to LCC. It is reminded in the standard that clients should be
clear about the boundaries of the LCC.
A substantial part of the Principles of Life Cycle Costing section is allocated to elaborating
on the stages of whole life cycle of building project. The content of the subsequent sections
is also briefly discussed in this section.
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In the Instruction for LCC Appraisal of Options/Alternatives section, the parameters for LCC
are discussed. The parameters required include:
l Service life, life cycle and design life
l Period of analysis
l Cost variables for
o Acquisition costs
o Maintenance, operation and management costs
o Residual values/disposal costs
o Discount rate
o Inflation
o Taxes
o Utility costs including energy costs.
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Figure 4.1: Typical scope of costs for WLC and LCC (extracted from ISO 15686-5, Figure
3).
Davis Langdon Management Consulting
June 2005
10
In the Appraisal of Whole Life Costs in Investment Options Appraisals section, the
following issues, which are additional to LCC appraisal but not mandatory, are discussed:
l Externalities such as the social, environmental or business costs or benefits of production
and consumption.
l Environmental cost impacts
l Social costs and benefits/ sacrifices
l Sustainable construction/ environmental assessment
l Intangibles
l Future income streams
l Financing costs.
The equations for computing LCC decision criteria, such as nominal costs, discounted costs,
and net present value (NPV) are provided in the Decision Variables How to Calculate LCC
section. In the Uncertainty and Risk How to Inform Decision Making Using LCC section,
the issues that contribute to uncertainty are first discussed. Two more commonly used risk
analysis techniques, Monte Carlo analysis and sensitivity analysis are also discussed.
In the Reporting section, the items that should be included in a LCC report are listed. It also
gives advice on data and analysis structure, and necessary records for future reviews. This
part of ISO 15686 provides examples of LCC in the appendices.
4.2
NS 3454: Life cycle cost for building and civil engineering work principles
and classification
The Norwegian standard, NS 3454 covers all types of construction projects and building
components, and is a tool to facilitate programming and design as well as management,
operation, maintenance and development (MOMD). NS 3454 contains the following
information:
l Scope
l Normative references
l Terms and definitions
l Cost schedule
o Main categories
o Sub-classification of the main categories
l Table A.1 Standard categories and additional categories
l Table B.1 Examples of capital costs
l Table B.2 Examples of management costs
l Table B.3 Examples of operating costs
l Table B.4 Examples of maintenance costs
l Table B.5 Examples of development costs
l Table C.2 Examples of servicing and support costs
l Table C.3 Examples of potential of the property
l D.1
Fixed monetary unit
l D.2
Real rate interest
l D.3
Net present value
l D.4
Annuity
l D.5
Net present value calculations and the annuity cost factor.
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12
Table 4.1 - The relationships between cost categoris and key collective terms (extracted from NS 3454)
STANDARD CATEGORIES
1 Capital cost
10 (Unused)
2 Management
cost
20 (Unused)
11 Project cost
21 Taxes
12 Residual cost
22 Insurance
13
14
23
Administration
24
15
25
16
26
17
ADDITIONAL CATEGORIES
REAL ESTATE AND PROPERTY MANAGEMENT
FM Facilities Management
MOMD
3 Operating cost
4 Maintenance 5
Development
cost
cost
30 (Unused)
40 (Unused)
50 (Unused)
6 Unused
60 (Unused)
31
Daily
operation
32
Cleaning
services
33 Energy
41 Scheduled
maintenance
42
Replacements
43
51
Current
rebuilding
52 Official rules
and requirements
53 Upgrading
61
44
54
64
45
55
65
46
56
66
27
34 Water and
sewage
35
Waste
disposal
36 Watchguards
and security
37 Outdoor
47 Outdoor
57 Outdoor
67
18
28
38
48
58
68
19
Miscellaneous
29
Miscellaneous
39 Miscellaneous
49
Miscellaneous
59 Miscellaneous
69
62
63
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8 Potential of
the property
80 (Unused)
71
Administrative
office
management
72
Switchboard
and
receptionist services
73 Canteen and/or catering
services
74 Furniture, fixtures and
fittings
75 Moving workplaces and/or
job rotation
76 Telecommunications and
IT-services
77 Postal and messenger
services
78 Supplies and copying
services
79 Miscellaneous
81 Rebuilding
9
Unused
90
(Unused
)
91
82 Additions /
extensions
83
92
84
94
85
95
86
96
87 Outdoor
97
88
98
89
Miscellaneous
99
93
4.3
13
Recommendation
Adopt a common European Methodology for assessing Life Cycle Costs (LCC) of construction.
Encourage data collection for benchmarks, to support best practice and maintenance manuals.
Public procurement and contract award incorporating LCC.
Life cycle costing indicators should be displayed in buildings open to public.
Life cycle costing should be carried out at the early design stage of a project.
Fiscal measures to encourage the use of LCC.
Develop Guidance and fact sheets.
The content of the report, with the emphasis on the seven recommendations, is as
follows:
l Introduction
l LCC Methodology (Recommendation 1)
l Data Collections, Benchmarking and Manuals (Recommendation 2)
l LCC and Public Procurement (Recommendation 3)
l Promoting Sustainability through LCC (Recommendations 4, 5, 6 and 7)
In the LCC methodology section, the issues that improve the LCC process are first
mentioned. A three-level LCC process, which is make up of three appraisal levels:
strategic, system and detail is elaborated. The strategic decision level is mainly for
the initial appraisal stage in the pre-construction phase. In this stage, a lot of
assumed inputs are used. The system and the detail decision levels are mainly used
in the design stage (pre-construction phase). In these levels, the assumptions made
earlier are eventually defined. The life cycle stages considered include acquisition
(including pre-construction and construction), operation, maintenance, replacement
(or refurbishment), and demolition. The information and decisions for these stages
are discussed. In this section, the development of a common methodology of LCC
with a classification of cost components at various stages of life cycle is
recommended.
In the Data Collections, Benchmarking and Manuals section, the necessity to reduce
the uncertainties in data is recognised. More reliable product information should be
used, and/or the uncertainties should be accommodated in the LCC system. More
research is suggested to address the relationship between the environmental quality
and the performance of buildings. In the recommendation, public and private clients
are advised to share their cost data. LCC benchmarks at national and European
levels, with comprehensive criteria, and maintenance manuals that contain
comprehensive maintenance details should also be developed. In the LCC and
Public Procurement section, it is recommended that LCC should be incorporated in
the Economically Most Advantageous Tender (EMAT) method (Working Group on
Abnormally Low Tender, 2001). EMAT is a tender evaluation procedure developed
June 2005
14
by the EMAT task group. In this procedure, a tender is selected based on not only
the price, but also other criteria.
In the Promoting Sustainability through LCC section, the methodology of predicting
the service lives of components elaborated in ISO 156861 is viewed as an essential
step for more accurately estimating the LCC. The Construction Products Directive
(89/106/EEC), which was developed for harmonising construction products, is
mentioned. The last four recommendations are related to this section, and the
explanations on these four recommendations are as follows:
Recommendation 4 LCC indicators assessed on the basis of the Common
European Methodology should be clearly displayed in all new and renovated
buildings exceeding 1000m2 floor area accessible by the public.
Recommendation 5 The opportunities for modifying the costs of a project are the
greatest at the beginning of a project.
Recommendations 6 members states should examine their fiscal regimes in order
to determine whether adjustments can be made to promote life cycle costing linked
to the Common European Methodology.
Recommendation 7 Develop guidelines and fact sheets to demonstrate the benefits
of adopting a LCC approach to procuring new and refurbishing existing buildings.
These should be supported by case studies.
The appendices contain a lot of useful information about LCC such as LCC
methods, tools and case studies. Reports and presentations prepared by TG4
participants, industrial practitioners and researchers are also attached.
EuroLifeForm, which was a European RTD project for developing a generic
probabilistic LCC approach, is included. Another interesting information in the
appendices is the investigation of integrating LCC and life cycle assessment (LCA).
4.4
4.5
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5.1
Present Value (PV) and Net Present Value (NPV) or Net Present Cost
(NPC)
Project costs that occur at different points in the life of a building cannot be
compared or summed directly due to the varying time value of money. They must
be discounted back to their present value through the appropriate equations. Costs
must first be converted into their time-equivalent value at the base date before being
combined to compute the LCC of a project stage or of a whole project. This timeequivalent value is referred to as the Present Value (PV) of the costs. The discount
rate is the interest rate used to convert (or discount) future expenditures to their
present value at the base date, taking into account the investors time value of
money. The discount rate selected for LCC analysis must make an investor
indifferent between a future cash amount and its present value.
The present day equivalence of a future cost, i.e. the present value, can be thought
of as the amount of money that would need to be invested today, at an interest rate
equal to discount rate, in order to have the money available to meet the future cost at
the time when it was predicted to occur. The effects of inflation can also be included
in these calculations.
The basic discount equation is as follows:
PV =
FV
(1 + d ) n
[5.1]
Where:
PV = the present value of a building or system
FV = the value in the future
d = the decimal discount rate (interest rate)
n = the number of years in the future
LCC according to TG4 Report (2003): LCC in Construction, is calculated as a
present value of the accumulated annual future costs (C) over a period of analysis
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time (t), e.g. 60 years (N), at an agreed discount rate (d), e.g. 2% = 0.02 pa,
dependant on prevailing interest and inflation rates. PV is calculated according to
the following formula.
N
PV =
t =0
Ct
(1 + d ) t
[5.2]
Where:
Ct = sum of all relevant costs less any positive cash flows occurring in period t
N = number of periods comprising the study period
The above formula was adopted by the American Society for Testing and Materials
(ASTM 1989) and then by the EU in their TG4 report (2003). The initial ASTM
standard practice on LCC was based in part on a publication dated as early as 1980.
PV can be calculated using nominal costs and discount rate based on projected
actual future costs to be paid, including general inflation or deflation, and on
projected actual future interest rates. Nominal costs are generally appropriate for
preparing financial budgets, where the actual monetary amounts are required to
ensure that actual amounts are available for payment at the time when they occur.
PV can be calculated also using real costs and discount rate, i.e. present costs
(including forecast changes in efficiency and technology, but excluding general
inflation or deflation) and real discount rate (dreal), which is calculated according to
the following formula, where (i) = interest rate and (a) = general inflation (or
deflation) rate, all in absolute values pa. e.g. 2% =0.02.
d real =
1+ i
1
1+ a
[5.3]
The present value of future costs reduces rapidly over time for different discount
rates. This makes capital investment for better long-term performance unattractive
to a developer in monetary terms.
In LCC analysis, all relevant present and future costs (less any positive cash flows)
associated with an energy system are summed in present or annual value during a
given study period (e.g., the life of the system). These costs include, but are not
limited to, energy, acquisition, installation, operations and maintenance (O&M),
repair, replacement (less salvage value), inflation, and discount rate for the life of
the investment (opportunity cost of money invested).
Criteria for cost effectiveness can be subjective depending on the investment
decision maker. Generally, a project is cost effective if it has an SIR greater than
one, an AIRR greater than the discount rate, an LCC lower than the next best
alternative energy system, and a simple payback period shorter than the life of the
building.
5.1.1
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cost at 20 years, and at higher discount rates the NPV reduces even further. On
purely economic grounds this makes it more attractive to spend less now and more
later.
Figure 5.1: The change in Net Present Values with time, expressed as a percentage
of current cost.
Furthermore, the uncertainties associated with predicting changes in future interest
and inflation rates can be greater than those attached to predictions of service life.
Care should be taken, therefore, when applying discount rates within a LLC
calculation.
Almost all models found in the literature employ the NPV approach. However,
different nomenclature and/or cost breakdown structure are used to describe
principal components of LCC. The American Society for Testing and Materials
(ASTM 1983) published the following model:
NPV = C + R S + A + M + E (+W + O )
[5.4]
Where:
C = investment costs
R = replacement costs
S = the resale value at end of study period (residual costs)
A = Annually recurring operating, maintenance and repair costs
M = Non-annually recurring operating maintenance and repair cost
E = energy costs
W = often isolated water costs
O = other costs (e.g. costs of contract)
The unique feature of this model is the separation of energy costs, and hence
different discount rates can be employed to reflect different inflation rates.
The ASTM WLC model distinguishes between energy and other running costs
which is useful in adopting different discount rates for these two cost items.
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NPV can be defined as the present value of cash flows minus the present value of
costs. The analysis is conducted for a previously determined time span and
discounted to the present cash flows and costs; a discount rate has to be arbitrated.
In the analysis the value of the discount rate used is crucial since NPV is sensitive to
the discount rate chosen. Life cycle costing analysis differs from NPV since cash
flows are left out.
5.2
5.2.1
[5.5]
The use of the EAC method implies that the project will be replaced by an identical
project.
5.2.2
5.2.3
Internal rate of return (IRR) and adjusted Internal Rate of Return (AIRR)
Internal rate of return (IRR) is the discount rate that makes the estimated NPV of an
investment equal to zero. The IRR rule is to take a project when its IRR exceeds
the required return.
Adjusted internal rate of return (AIRR) is an annual yield from an alternative over
the study period, taking into account reinvestment of interim returns at the discount
rate. AIRR should be greater than discount rate and is used for ranking projects.
5.2.4
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has the maximum NS (> 0) for optimal cost effectiveness. The option with the
highest NS will also have the lowest LCC.
5.2.5
5.3
Financial variables
5.3.1
Discounting is a technique used to compare costs and benefits that occur in different
time periods. It is a separate concept from inflation, and is based on the principle
that, generally, people prefer to receive goods and services now rather than later
(OGC, 2005). This is known as time preference. This guidance does not cover the
topic in great detail as it is a procedure common to many cost appraisal methods and
well understood by purchasing officers. The subject is fully explained in The Green
Book: Appraisal and Evaluation in Central Government (URL3). When comparing
two or more options, a common base is necessary to ensure fair evaluation. As the
present is the most suitable time reference, all future costs must be adjusted to their
present value. Discounting refers to the application of a selected discount rate such
that each future cost is adjusted to present time, i.e. the time when the decision is
made. Discounting reduces the impact of downstream savings and as such acts as a
disincentive to improving the reliability of the product. The procedure for
discounting is straightforward and discount rates for government purchases are
published in the Green Book. Discount rates used by the industry will vary
considerably and care must be taken when comparing LCC analyses which are
commercially prepared to ensure a common discount rate is used.
It is important not to confuse discounting and inflation. The Discount Rate is not the
inflation rate but is the investment premium over and above inflation. Provided
inflation for all costs is approximately equal, it is normal practice to exclude
inflation effects when undertaking LCC analysis.
In LCC analysis, the discount rate is the parameter used to represent the time value
of money. It reflects the opportunity cost of capital to an investor over time. If it
does not matter when costs and benefits incur they can be added without
consideration. However, if the timing of costs and benefit flows is important, the
investment calculus needs to reflect this. A common technique is the use of
discounting. The time value of money, expressed as a discount rate, depends on
inflation, cost of capital, investment opportunities and personal consumption
preferences. If the discount rate is set to 0% this means that the timing does not
matter; the higher the discount rate the more importance is given to the near-present.
Two types of discount rates are used in computing the present value: a real rate or
a nominal rate. The real discount rate reflects the time value of money without
accounting for the effects of inflation and deflation. That is, it reflects the real
earning power of money over time. The real discount rate (excluding the rate of
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inflation) is used when all cost data are denominated in terms of constant
currency, that is, currency with constant purchasing power. Nominal or market
discount rates take into account general inflation or deflation plus the real earning
power of money. A nominal rate is used when all cost data are denominated in
current currency, that is, currency that change in value from year to year
depending on the general price level. The need for a nominal or market discount rate
often arises when the future cost estimates are based on a maintenance contract that
is typically specified to be paid in current currency in future time periods.
In the private sector, an individual investors discount rate is determined by the
investors minimum acceptable rate of return for investments, as governed by
available investment opportunities and his or her risk tolerance. Because different
investors have different investment opportunities available to them as well as
different levels of acceptable risk, private discount rates vary greatly.
Most environmental projects will be sponsored by government agencies rather than
by private investors. Government agencies in member countries generally publish
discount rates to be used in the economic analysis of government projects. The
frequency and level of detail vary from country to country.
It is recommended to use two real discount rates, e.g. 0 and 2 percent and then
evaluate possible differences of these results. Real discount rate reflects general
productivity of producer, sector or field. Usually general productivity has been
between 0 and 2 % in long term. Buildings have long service lives. Because of
difficulties to predict inflation in long term, it is recommendable to use real costs
(without inflation) and the real discount rate. Over a long period of time, the real
discount rate is usually 0 - 2% pa only. At low discount rates, long-term future costs
and savings are immediately meaningful, and therefore, investment for a better
future would look more rewarding.
The Treasury discount is i = 3.5 percent. For the majority of public sector projects,
particularly at the options appraisal stage, the Treasury discount rate of 3.5 percent
will be used. Whilst it would be incorrect to say that this rate is net of inflation it
does not need to be adjusted for inflation.
As the life cycle costs are discounted to their present value, selection of a suitable
discount rate is a crucial decision in a LCC analysis. A high discount rate will tend
to favour options with low capital cost, short life and high recurring cost, whilst a
low discount rate will have the opposite effect. The discount rate may reflect the
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effect of only the real earning power of money invested over time or it may also
reflect the effects of inflation (Woodward, 1997).
Much of the literature in this area offers little in the way of firm recommendations
regarding the final selection of an appropriate rate - estimates vary between 3-4%
and in excess of 20%. Furthermore, there is a variety of views within the general
discourse regarding the actual composition of the discount rate. The most popular
methodologies appear to be:
l at the current or expected rate the organisation must pay for the use of its
borrowed funds;
l at the rate of return that could be expected from the loaning of money, but which
is denied to the organisation by the need to fund its own projects (sometimes
referred to as the opportunity cost);
l at the lowest rate of industrial borrowing for a financially sound, wellestablished company;
l a test discount rate can be used based on the assumption that when inflation rates
are reasonably low there is a stable relationship between inflation and base rate,
implying a real discount rate of 4%;
l investments in long-term treasury bonds can be assumed to have no risk.
Therefore, the discount rate can be taken as the Treasury bond rate less an
allowance for the expected rate of inflation.
The appropriate discount rate will vary significantly from organisation to
organisation, and will need to be determined by the skill of the industrial accountant
rather than by mere arbitrary selection. As in the case of estimating the appropriate
rate of inflation, calculating the relevant discount rate is rarely easy. However, help
is available from the financial management sub-discipline of accounting, where over
the years many sophisticated techniques have been developed to assist with this
particular problem.
When undertaking a LCC analysis, there may be some key parameters about which
uncertainty exists, usually because of the inadequacy of the input data. How
sensitive are the results to variations in these uncertain parameters? For example,
the following variables could be suggested to be the subject of sensitivity analysis:
l frequency of the maintenance factor;
l variation of the asset's utilisation or operating time;
l extent of the system's self-diagnostic capability;
l variation of corrective maintenance hours per operating hour;
l product demand rate;
l product distribution time (the 'logistics pipeline');
l the discount rate.
Generally the five data categories could be identified, according to Kishk et al.
(2003):
l economic variables
l cost data
l occupancy data
l physical data
l performance and quality data
According to NSW Treasury (2004), the discounting of costs takes account of three
elements:
June 2005
l
l
22
the interest rate available from long term investment in bank or government
bonds
the interest rate that business would expect as a return for risk
the inflation rate that would affect the purchasing power of the currency.
In practice, estimating the discount rate is not a straightforward matter. Most of the
public projects are financed by more than one funding source. Furthermore, there is
no consensus on how to value the real earning capacity of these public funds. The
choice of the discount rate is one of the most debatable topics in public project
evaluation. Several philosophies have been suggested over the years for choosing
the appropriate discount rate. Important among them are:
l Opportunity Cost of Capital: Opportunity cost is the cost of the forgone
investment that would have been taken if not invested by this project. The
opportunity cost of capital rationale assumes that the money used for funding
public projects is withdrawn from private savings, which would have gone
otherwise into private investment. Accordingly, the discount rate should be the
pre-tax rate of return that would have been experienced on the private uses of
funds.
l Societal rate of time preference: This is the interest rate that reflects the
governments judgment about the relative value, which the society as a whole
assigns, or which the government feels it ought to assign, to present versus future
consumption. The societal time preference rate is not observed in the market and
bears no relation to the rates of return in the private sector, interest rates, or any
other measurable market phenomena.
l Zero Interest Rate: Advocates of a zero interest rate argue that when tax monies
(e.g., highway user taxes) are used, such funds are free money, because no
principal or interest payments are required. The counter argument is that zero or
very low interest rates can produce positive benefit/cost ratios even for very
marginal projects and thereby take money away from more truly deserving
projects. A zero interest rate also fails to discount future expenditures, making
tomorrows relatively uncertain expected costs just as important to the decision
as todays known costs.
June 2005
23
Cost of Borrowing Funds: The interest rate should match the rate paid by
government for borrowed money. This approach is favored by many agencies
and is supported by the argument that government bonds are in direct
competition with other investment opportunities available in the private sector.
In an inflationary environment, the future price increases for goods and services are
greater or less than the general inflation rate, and the costs or benefits associated
with an alternative are expressed in actual currency. Actual currency reflect both
the earning power and the purchasing power of money, and before they can be
discounted they must be adjusted to constant currency to negate the effect of
inflation or deflation. If the specific inflation rate (k) for a particular cost item is
increasing at a faster rate than the general inflation rate (j), the future value of the
item expressed in constant currency will also increase. This increase in future
constant currency may have a significant impact on the PV.
Many times an increase in costs is due to an increase in the quantity or quality of
goods and services rather than inflation. For example, as building systems or
components age they may require an increasing level of maintenance and repairs.
Such a non-inflationary escalation (e) will also increase the constant currency value
of future costs.
The following general formula shows the relationship between today's and future
constant currency in an inflationary environment.
Constant Currency at Year n = (Actual Currency Today)*(1 + e)n(1 + k)n(1 + j)n
[5.6]
Where:
e = non-inflationary escalation rate
k = specific inflationary rate
j = general inflationary rate
e, k, and j can be negative, zero, or positive and are expressed as a decimal
5.3.2
Discounted costs
Discounted costs are calculated by taking costs that occur in future years and
reducing them by a factor derived from the discount rate. Different discount rates
apply depending on whether nominal costs or real costs are being discounted. With
nominal costs, the discount rate should include an inflation factor. If real costs are
used, the discount rate should not include an inflation component (Glucha &
Baumannb, 2003).
Different discount rates also apply to different organisations and individuals.
To convert a real cost to a discounted cost:
q=
1
(1 + d ) n
[5.7]
where
June 2005
24
q=
1
(1 + d ) (1 + a ) n
n
[5.8]
where
q = the discount factor;
d = the expected real discount rate per annum;
a = the expected percentage increase in general prices per annum;
n = the number of years between the base date and the occurrence of the cost.
An alternative given by for example Gray et al. [25] is to use an environmental
hurdle rate technique. This technique is exemplified in the box by three hurdle rates:
a green discount rate for costs that do not contribute to negative impact on the
environment, a yellow rate for costs that have an uncertain contribution to
negative impact on the environment, and a red rate for costs that have a certain
negative impacts on the environment. If red rates are set to 0% in the LCC
calculation, red types of costs do not get discounted over time and therefore cause
a more significant contribution to the total result when discounted. The use of red
rates is valid as long as future damage is assumed as negative as todays. For
example, discharging toxic waste tomorrow should be as negative for the
environment as discharging toxic waste is today. However, from an environmental
point of view, the timing of the emissions depends on the state of the environment,
which can improve or deteriorate with time. In addition, waste management
technology may also improve in the future. Because of such developments, it may
be more viable that certain environmental costs are considered as green or yellow
and thus discounted in the LCC calculation. This reasoning illustrates how complex
and difficult it is to handle environmental costs and how over-simplification can
misguide environmental decisions-making.
Another way of handling the time problem is to indicate which costs may be
expected to increase more than other costs. A differential escalation rate can thus be
used to indicate relative price changes.
5.3.3
Real cost is the cost expressed in values of the base date excluding inflation but
including price movements due to changes in efficiency, technology, etc.
Nominal Cost
Nominal cost is the expected price that will be paid when a cost is due to be paid
(i.e. including inflation and price movements due to changes in efficiency,
technology, etc.)
June 2005
25
[5.9]
The Real Cost discounted by the Real Discount Rate is equivalent to the Nominal
Cost discounted by the Nominal Interest (or Discount) Rate. The Discounted Cost is
thus often referred to as the Net (or Discounted) Present Value. Therefore, for an
asset component having a Nominal Cost, CN in Year n, then the Real Cost (or
Present Value), CR at the base date (Year 0) is given by:
C R = C N (1 + f ) n
[5.10]
and the Discounted Cost (or Net Present Value), CD at the base date (Year 0) is thus:
[5.11]
5.3.4
Inflation
Besides the above discussion of the effects of inflation on the discount rate in LCC,
inflation can be utilized for another purpose in LCC. It is not uncommon to find that
the available documented prices of construction, material, labor, or any LCC-related
components are dated. When this is the case, these unit prices must be converted to
todays value by inflating them. This can be done by multiplying the dated price
by the relative increase in the price index between the date of the price and the
present. Price indexes can be a broad-based price index, such as the implicit deflator
for Gross Domestic Product (GDP) or the Consumer Price Index when the dated
prices concern general items such as the value of time. Alternatively, a specific
price index such as the Highway Construction price index can be considered a better
indicator for prices related to construction activities.
Treatment of Inflation or Deflation in Cost Estimates
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26
excluding inflation, express all costs in terms of base date currency and use the real
discount rate. On the other hand, if costs are expressed in current currency (i.e., if
they include changes in prices), then a consistent projection of general price
inflation must be used throughout the cost estimates.
It is preferable to use constant-currency analysis since it eliminates the need to
estimate the rate of inflation over the duration of the study period. Current-currency
analysis may be used if there are budgeting considerations based on current
currency included in the analysis. For example, if cost data are based on a multiyear
contract with fixed current currency amounts, adjust future expenditures for
inflation.
Where the Treasury discount rate is not appropriate, present value calculations will
take account of inflation (Hunter et al. 2005). Inflation is a rise in the general price
level reflecting a decline in the purchasing power of money. The arguments
regarding inflation are long and complex. Some authors say that it can be ignored
altogether based on the reasoning that income also goes up with inflation. Inflation
becomes complex when the rates of inflation for differing items are not constant,
e.g. the price of electricity may be rising at a rate in excess of the general inflation
rate. In general, a rate based on the difference between the bank base rate and the
inflation rate should give a satisfactory rate for comparative calculations.
5.3.5
Taxes
There are two aspects in considering taxes in LCC calculations. The first deals with
the probability that environmentally inefficient structures will attract future
environmental taxes, and hence, LCC is an essential activity insuring elimination of
this kind of risks. This can be addressed in the same way as any other risks. For
each risk, the probability of occurrence and the likely impact can be established and
a risk allowance made.
The second deals with general allowances for unspecified taxes in the calculations.
There are several areas where costs might increase at a rate higher than inflation for
a variety of reasons. Including taxes in the LCC calculations favours projects with
reduced initial costs as the general experience is that tax relieves are generally
applicable against repairs and maintenance. Although capital costs for plant and
equipment are usually a budgeted one-off attracting various tax allowances, the
ongoing reliability, efficiency and maintainability will affect the bottom line for the
life of the equipment.
5.3.6
Residual values
The residual value of a structure, a system or a component is its remaining value at
the end of the contract, or at the time it is replaced during the contract period.
Residual values can be based on the value in place, resale value, salvage value, or
scrap value, net of any selling, conversion, or disposal costs. As a rule of thumb, the
residual value of a system with remaining useful life in place can be calculated by
linearly prorating its initial costs. For example, for a system with an expected useful
life of 15 years, which was installed 5 years before the end of the contract, the
residual value would be approximately two third of its initial cost.
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5.4
27
Application
To building decisions for which
determining factor is cost
effectiveness.
For deciding whether to accept or
reject a given investment by
identifying cost-effective
components, systems, O&M
models, etc.
For finding the economically
efficient choice among building
alternatives.
For budget allocation decisions.
Should be used as a
supplementary measure of
economic performance. (if used
alone results can be
misleading).
Comments
LCC is used to determine if an
investment in a given system or
modification is worthwhile.
June 2005
5.5
Source
Comments
UK HM Treasury currently
3.5%
28
6.1
Analysis period
The analysis period is the period of time over which the life cycle cost is to be
evaluated. The length of analysis period, which can be 20 or 40 years, is dependent
on the building owners preference. Salway (1986) suggested that the time scale for
analysis should be the least of physical, functional, and economic lives.
Nevertheless, the economic life is usually adopted in the analysis for cost
optimisation (Kirk and DellIsola, 1995). Generally, there is a consensus that the
analysis period should not be too long, since the discounting factor applied in the
analysis tends to make the future costs less significant. In addition, the uncertainties
in the future cannot be effectively defined based on the existing data. In ISO 156865, the typical analysis periods are listed as follows:
l The period of foreseeable need or occupation of the constructed asset (the life
cycle);
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l
l
6.2
29
ESLC = RSLC A B C D E F G
where
[6.1]
= quality of components;
= design level;
= indoor environment;
= outdoor environment;
= in-use conditions;
= maintenance level.
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30
Category
Repairable or easily
Less easily repairable or
Lifetime of
2
replaceable
replaceable
works
1
Short
10
10
10
10
1
Medium
25
10
25
25
1
Normal
50
10
25
50
1
Long
100
10
25
100
1
In exceptional and justified cases, e.g. for certain repair products, a working life of 3 to 6 years may be
envisage (when agreed by EOTA TB or CEN respectively).
2
When not repairable or replaceable easily or with some more efforts.
Table 6.2 Suggested minimum design lives for components (adopted from
ISO, 2000).
Design
life of
building
Components
Building
services
Inaccessible or
Replacement is
Major replaceable
structural
expensive or difficult*
Unlimited Unlimited
100
40
25
150
150
100
40
25
100
100
100
40
25
60
60
60
40
25
25
25
25
25
25
15
15
15
15
15
10
10
10
10
10
Note 1: Easy to replace components may have design lives of 3 or 6 years.
Note 2: An unlimited design life should very rarely be used, as it significantly reduces design options.
* including below ground drainage.
Equation [6.1] only produces deterministic estimated service lives for products.
Since the life of any construction product is usually statistically scatter, it has been
advocated to develop a stochastic service life prediction model for accommodating
the uncertainties (CIB 2004, Boussabaine and Kirkham, 2005). A stochastic work
example for service life estimation is included in ISO 15686-5 (ISO, 2006). The
factor inputs for equation [1] can be defined in the form of probability distribution
functions (pdfs) using supplier information, test data, or estimates from previous
experience. If historical data are not available, subjective pdfs can be defined.
However, subjective data may contain biases. Monte Carlo simulation (MCS) can
be applied to generating a pdf of service life for a product, and discrete statistical
outputs, such as mean, standard deviation, and 90th percentile, can then be
calculated.
6.3
Sources of data
Using reliable and up-to-date information can enhance the accuracy of life cycle
cost computed. Flanagan et al. (1987) and Boussabaine and Kirkham (2005) listed
three major data sources for LCC:
l Data from manufacturers, suppliers, contractors and testing specialists
o Material and product suppliers and manufacturers;
o Government testing bodies;
o Institutions such as Building Research Establishment (BRE), American
Society of Civil Engineers.
l Forecasting models
June 2005
31
If the required data is not available, mathematical models can be developed for
analysing costs. Statistical techniques can be incorporated to address the
uncertainties.
l Historical data
In the UK, the consistent sources such as BCIS and Spons are available for cost
estimation. Other sources include clients and surveyors records, and journal
papers. The metrics used in the data are usually in the format of cost/unit. These
metrics may not provide effective information applicable to variety of the
procurement methods EU-wide.
Overall list of sources of data can be assembled as follows:
l Project agreed life expectancies (UK-BCIS - Survey of Life Expectancies)
l Manufacturers, Suppliers and Trade Associations
l Research Organisations (UK - BRE, CIRIA, TRADA)
l Test Houses and Certification Bodies
l British and European Standards
l Research papers and reports
l UK - CIBSE Economic Life Factor codes
l UK BCIS Building Cost Info Service (BMI Building maintenance info)
l UK - HAPM, BPG (part of BRE) and BLP Component Life Manuals
l UK - Occupiers Property Database (OPD)
l UK BRE - Green Guide to Building Specification
6.4
Cost variables
LCC usually requires many cost inputs for calculating the costs for different phases
of a project life cycle. The cost variables are usually categorised into groups. Thus,
ISO 15686-5 (ISO, 2006) have provided a list of cost variables required, which will
be illustrated in this section.
Acquisitions costs
Acquisition Costs include:
l site costs;
l temporary works;
l design/engineering costs;
l regulatory/planning costs;
l construction and earthworks;
l commissioning costs/fees;
l in-house administration.
Maintenance, operation and management costs
Maintenance, operation and management are necessary for ensuring that a building
functions and operates properly throughout its life cycle. The cost items to be
considered in this phase in are as follows:
l rates (this is an operation cost);
l insurance (this is an operation cost);
l energy costs (this is an operation cost);
l water and sewage costs;
l facilities management (this is operation/management cost);
l cleaning (this is an operation cost);
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l
l
l
l
32
June 2005
33
costs, replacement costs, and residual values / disposal costs. The models
elaborated in this chapter make use of NPV, whose generic form is shown in
equation [7.1], for comparing different alternatives. In the models, different costs
are grouped according to their types.
T
NPV =
t =1
Ct
(1 + r ) t
[7.1]
Where
NPV = Net present value;
Ct
= Cost of item t;
= discount rate;
The ASTM (1983) LCC model is shown in equation [7.2]. The model has all the
energy costs grouped in a single component, which will help evaluating the total
energy cost under different discount rates.
NPV = C + R + A + M + E S
[7.2]
Where
C
Bromilow and Pawsey (1998) developed a simple model for quantifying the life
cycle costs of university buildings. Most of the costs are categorised into either
annual cost, which are continuous over time, such as maintenance, cleaning, energy
and security, and cost for discontinuous tasks such as repainting or replacement of
building components.
n
t =1
NPV = c0 + c it (1 + rit ) t + c jt (1 + r jt ) t d (1 rd ) T
[7.3]
Where
C0
cit
cjt
rit and rjt = the discount rates applicable to support functions i and j respectively;
d
rd
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34
Al-Hajj and Horner (1998) developed a simple model (equation [7.4]) for estimating
the maintenance and running costs of university buildings. Base on a set of building
data in certain category of buildings, the models only take into account the cost
significant items, which are selected based on Paretos 80/20 rule, and the cost
model factor (CMF), which is the ratio of the cost of the cost-significant items to the
total cost, is computed. The cost data from different years of survey will be
discounted to reflect the current cost values. The total maintenance and running
costs of a building are estimated based on the cost of these significant items for this
building and the CMF.
TC =
1
CMF
CSI
i =1
[7.4]
Where
TC
[7.5]
June 2005
35
Where
P
CI
= Initial cost;
= Discount rate;
In the model, the years of analysis and the discount rate are assumed to be fixed.
Based on the fuzzy arithmetic addition (Ross, 1995), the individual values for l, m
and h on the right hand side of the equation are processed separately for computing
the outcomes in terms of Pl, Pm and Ph. The outcomes of different alternatives,
which are in the form of fuzzy sets, are compared using the qualified comparison
approach. The simple structure of the model can effectively handle the single future
costs and annual costs. However, non-annual recurring costs will have to be treated
as a set of single future cost, which will require more computation effort (Kishk et
al., 2003).
Kishk and Al-Hajj (2000) developed a fuzzy life cycle costing model, which is
shown as equation [7.6]. In this model, the discount factors for annual costs and
non-annual costs are formulated for simplifying the time and effort required in the
computation process. All the variables in the equations are treated as fuzzy sets, and
the NPV is quantified by making use of the fuzzy arithmetic multiplication, addition
and subtraction. The fuzzy sets of NPV of different alternatives can be normalised
and compared.
nari
[7.6]
j =1
Where
C0i
= the initial cost of alternative i;
PWA = present worth factor for annual recurring costs =
1
[1 (1 + r ) T ] ;
r
Aij
= annual recurring costs of alternative i;
Cik
= non-recurring costs of alternative i.
PWN = the present worth factor for a non-annual recurring cost =
1 (1 + r ) n f
;
(1 + r ) f 1
ik ik
ik
nik
Kirkham et al. (1999) made use of regression technique to model the energy cost of
sport centres. In the regression models, the floor area and the number of users are
the two independent inputs. The models developed have different coefficients and
constants. Two examples of the models are shown as [7.7a] and [7.7b]. Mean
June 2005
36
Absolute Percentage Error (MAPE) was used to test the accuracy of the models. In
order to develop an accurate regression cost model, abundant information for a
specific cost component is usually required. However, its application is limited to
that particular cost component.
[7.7a]
[7.7b]
Where
CE
8
= Energy Cost.
8.1
June 2005
37
annual or present worth terms) ranking above all other feasible options and is
therefore presented as the recommended option.
Finally, the results of the LCC procedure are passed on to the infrastructure
owner to support rational decision making.
The deterministic approach assigns each LCC input variable a fixed, discrete value.
The analyst determines the value most likely to occur for each input parameter. This
determination is usually based on historical evidence or professional judgment.
Collectively, these input values are used to compute a single LCC estimate.
Traditionally, applications of LCC have been deterministic ones. A deterministic
LCC computation is straightforward and can be conducted manually using a
calculator or automatically with a spreadsheet. However, it fails to convey the
degree of uncertainty associated with the PV estimate.
It is important to note that the derivation of cost profiles for each option analysed
within a LCC procedure ranges from straightforward to sophisticated ones. More
sophisticated means of deriving cost profiles for LCC investigations include the
combining of optimisation techniques and (stochastic) life cycle performance
predictions in developing optimal maintenance strategies pertinent to a particular
structure. Derivation of cost profiles may be found in (Ehlen, 1999, Maharsia and
Jerro, 2002, Meiarashi et al. 2002 and Nystrom et al. 2003). Regardless of the
computational sophistication involved, however, the derivation of cost profiles
pertinent to infrastructure related options within LCC investigations will rely on
supporting cost estimating techniques relevant to the options at hand.
The deterministic method underlying LCC investigations provides a logical ordering
of analytical activities and a credible means of ranking feasible options pertinent to
the construction, refurbishment, and on-going management and support of
infrastructure see Figure 8.1 below. However, this straightforward deterministic
approach provides little guidance to the engineer or designer attempting to
adequately represent the complexity and uncertainty inherent to LCC investigations.
For this reason, the basic method is typically extended within LCC applications to
permit a logical means of addressing these shortcomings (Ehlen 1997; Arrien et al.
2001).
Of these, a common extension to the basic method of LCC involves the use of
sensitivity analysis and risk analysis.
June 2005
38
LCC Implementation model (costing procedure) (based on Kirk and DellIsola 1995)
Project data
-Program
-Standards
-Resources
-Economics
-Finance & financial modelling
-Risk assessment
-Etc.
Facility data
-Initial costs, lifespan
-Physical characteristics
-Stages of lifecycle for LCC application
-LCA requirements
-Functional use
-Etc.
Sensitivity analysis
In general, sensitivity analysis involves the behaviour of model variables over
predetermined bounds to determine their relative effect on model outcome. Through
this process, analysts can:
l identify some subset of model variables that exert significant influence on model
results and (or)
l determine break-even points that alter the ranking of considered options.
Each of these goals provides important insight to decision makers who are rightly
sceptical of fixed values and attendant results. Sensitivity analysis, then, is a direct
admission that uncertainty often plagues even the most careful and judicious
deterministic analyses.
Following an initial deterministic ranking of feasible design options, sensitivity
analysis is employed to establish the sensitivity of model results (i.e. annual or
present worth measures) and rankings across model variables of particular concern
to analysts and decision makers see Figure 8.2. In the LCC literature,
demonstrations of this method may be found in many articles (Clemen, 1996, Ehlen
and Marshall, 1996, Hartmann et al., 2000, Kent and Murphy, 2000, Maharsia and
Jerro, 2002 and Meiarashi et al., 2002).
June 2005
39
June 2005
40
Project data
-Program
-Standards
-Resources
-Economics
-Finance & financial modelling
-Risk assessment
-Etc.
Facility data
-Initial costs, lifespan
-Physical characteristics
-Stages of lifecycle for LCC application
-LCA requirements
-Functional use
-Etc.
Sensitivity analysis
Risk analysis
Figure 8.3: LCC implementation model with sensitivity analysis and risk
analysis.
June 2005
41
Despite the introduction of risk analysis, however, note that sensitivity analysis
remains a part of any well ordered LCC method. The reason for this is strictly
pragmatic.
Obtaining probabilistic data for model variables can be a costly and time-consuming
process (even where expert engineering judgement is employed to efficiently extract
useful information). Hence, it is best to focus data gathering activities around model
variables that hold significant sway over LCC results and rankings. It is typically the
case that sensitivity analysis reveals only a handful of model variables that exert
substantive influence on LCC results and rankings (reflecting a 90/10 rule where,
in practice, 90% of model variability is explained by 10% of model variables).
Clearly, identifying these key variables provides focus to subsequent data gathering
activities needed to support risk analysis. The key linkage of sensitivity and risk
analyses is fundamental to the practice of decision analysis. A number of
researchers recommend the inclusion of risk analysis within well-ordered LCC
investigations.
From a broadly methodological standpoint, relevant literature includes Fabrycky
and Blanchard (1991), ASTM (2002), and Hawk (2003). A good example of risk
analysis employed to evaluate innovative infrastructure designs is found in Ehlen
(1999).
Risk analysis often involves a reassessment of considered options in the context of
risk preference. Where owners are risk neutral, comparison of alternatives may
proceed on the basis of expected monetary value alone. However, where attitudes
are risk averse or risk seeking, the probabilistic distribution of life cycle costs is
translated to some measure of utility. The measure of utility assigned to each
alternative then forms the basis for ranking. For the purposes of this chapter,
however, attention is limited to the case of risk neutrality a common practice
where public infrastructure investment is concerned. With regards to this issue,
Townley (1998) includes pertinent and readable discussions involving individual
versus collective risk and the Arrow-Lind theorem.
9
June 2005
9.1
42
9.1.1
Brainstorming
Brainstorming involves the open discussion among a group of participants to
exhaustively identify and assess risks for a project. Each participant can express his
view freely, without receiving criticisms from others. A brainstorming session is
usually led by a facilitator, who needs to convey the objectives of the session to
participants. A well mix of group members in terms of expertise, knowledge and
experience is essential to more effectively identify different sources of risks
(Chapman, 1998). Osborn (1963) suggests that the optimum size of a brainstorming
group should consist of 12 members.
9.1.2
Interviews
Interviews with experts are conducted on a one-to-one basis. Their opinions on
risks are acquired in the interviews. However, this technique is time consuming.
Thus, questions must be properly structured, and vague and confusing questions
must be avoided. Another concern about this technique is experts judgements on
risks may not be free from bias.
9.1.3
Checklists
Checklists contain the data of risks occurred in past projects. They are often used as
an aid to the risk identification process for minimising the reoccurrence of risks.
Nevertheless, checklists should not be used to initiate the risk identification process,
as they will confine the finding of new risks (ICE et al., 1998).
9.1.4
Cause-and-effect diagrams
Cause-and-effect diagrams, which are also known as fishbone diagrams or Ishikawa
diagrams, are a graphical presentation of the relationships between risk factors and
their effects. In each diagram, only an effect is allowed, and its risk factors are
listed in the fishbone structure (see Figure 9.1). The main branches are filled in
with the main risk factors. The next level horizontal lines represent the relevant subfactors. Nevertheless, the rigid structure does not investigate the relationships
between risk factors.
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43
Risk matrices
Risk Impact
Likelihood of Occurrence
Low
Medium
High
Low
Medium
High
Influence diagrams
Influence diagrams are directed graphs for modelling uncertainties in decision
making processes. In an influence diagram, variables are represented by nodes, and
dependencies or relationships among the variables are represented by directed arcs.
Influence diagrams are effective in providing an understanding of a complex
situation. However, an influence diagram will become too complex to analyse if it
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44
contains too many variables. Isaac (1995) suggests that there should not be more
than 15 variables in an influence diagram.
9.1.7
Risk registers
Risk registers are a format to systematically record the outcomes of risk
identification and assessment, and the information should be consistently updated
throughout the project lifecycle (Boussabaine and Kirkham, 2005). Risk registers
provide an effective means to communicate risk knowledge among project
participants (Patterson and Neailey, 2002). The information available in risk
registers can be used to initiate quantitative risk analysis, and to support the
subsequent risk mitigation process (Williams, 1994). Database systems are usually
utilised to store and maintain the risk data, which will be massive for large projects.
The following information has been suggested for inclusion in risk registers
(Williams, 1993; APM, 1997; ICE et al., 1998):
l The title and description of risk;
l The description of causes;
l The date of the risk identified and modified;
l The risk code;
l The ownership of risk;
l The likelihood of occurrence;
l The risk impact;
l The risk ranking;
l The risk mitigation action plan;
l The residual risk effects;
9.2
9.2.1
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45
variables will remain unchanged while a variable is being analysed has become its
major limitation (Flanagan et al., 1987). In practice, risk variables do not occur one
at a time. Variables evaluated in SA are assumed to be independent of each other,
but certain variables can be interdependent.
9.2.2
Decision trees
Decision trees are a technique that comprehensively displays alternatives or
scenarios for a project in a tree-like structure. In an investment decision-making
process, the costs, payoffs, and probabilities for the alternative can be assigned to
the decision tree. The expected monetary value (EMV) is computed by summing
the payoffs weighted by their probability values. Nevertheless, this technique
assumes that the nature of projects is static, but construction projects are usually
dynamic in nature (Thompson and Perry, 1992). In addition, it does not take into
account decision-makers risk attitudes. An alternative with higher EMV may come
with higher risk.
9.2.3
June 2005
46
f(x)
f(x)
Cost Component B
Cost Component A
Cost
Cost
After N iterations
f(x)
9.2.5
Markov chain
A Markov chain is a stochastic process with the memoryless property. In the
process, the previous states will not affect the prediction of the subsequent states if
the knowledge of the current state is known. Hence, the conditional probability
distribution of a future state Xn+1 given the present and past states is a function of
the present state Xn alone:
P( X n +1 = x | X 0 = x0 , X 1 = x1 ,..., X n = x n ) = P( X n +1 = x | X n = x n )
The Markov chain can be used to estimate the probability for the condition of a
building to change from good to bad for a certain time period. It has been
applied to predicting the residual service life of buildings (Kirkham and
June 2005
47
Boussabaine, 2005) and the life cycle performance of building components (Zhang
et al., 2005).
9.2.6
9.2.7
9.3
June 2005
48
Data availability?
Not available
Available
Intangible
Tangible
Uncertain
Non-random
Fuzzy set
theory
Neural
networks
Certain
Random
Probability &
statistics
Close form
solution
10.1
June 2005
l
l
l
l
l
49
These factors all result from human endeavours and therefore do not lend
themselves to accurate prediction. This is the key problem associated with
estimating component life expectancy.
The design and construction process tries to minimise these factors and experience
suggests that it is usually a combination of factors that leads to failure. For example,
a poor design that is poorly built and poorly maintained will fail when getting any
one of these processes right would allow it to perform adequately.
10.2
Aspect
Main features
Title
Country
Organisation
Status
(Policy)
context
Content
Information concerning the environmental characteristics of construction
products. It is one standard (XP P01-010) in two parts (1&2) :
Part 1 : Methodology and model of data declaration
Part 2 : Guidelines for the application of environmental characteristics to given
construction work.
in France
AFNOR (French Association for Standardisation)
The scheme is public and is accepted as an experimental standard. It is a
published experimental standard. Part 1 was published in April 2001. Part 2 has
been published in April 2002.
Historically, in 1994, the private French association of producers of construction
products (AIMCC), concerned by the development in France of High
Environmental Quality (HQE) building, launched a working group on
environmental data. This group produced a first format of environmental
declaration for construction product, aiming at producing both qualitative and
quantitative environmental information on products.
The development of the quantitative part was based on the ISO TR 14025.
Thus, quantitative information is based on LCA ISO 1404x series methodology,
and qualitative information must respect requirements of environmental
information, particularly ISO 14 020.
The aim of the scheme is to provide information and to give opportunities to
improve (design for environment), and not to compare competitive products.
The work of this group has been captured, developed and improved by the
French standardisation committee P01E in AFNOR, until it becomes a standard.
5 declarations have been produced at the moment, and 15 are about to come in
the 6 coming months (see list in appendix).
The different stakeholders seem to feel rather satisfied with the scheme: both
the use of ISO 1404x series methodology and the common format should
prevent from misuses of such declarations. However, some industries still adopt
a prudent attitude, waiting for the feedback of stakeholders about this kind of
information.
It is not clear at the moment how the scheme will be used in the future. There
are different possibilities:
The High Environmental Quality building reference is still active and promotes
June 2005
Development
s
Conceptional features
Objective
and target
Applications
and target
groups
Stakeholders
involved
Declaration
topic
Type
Procedure
Validation
and
verification
Presentation
50
June 2005
Acceptance
Cost to
perform a
profile
LCA-methodology
ISO
conformity
Methodology
transparency
Functional
unit (FU)
Choice of
product for
the
declaration
Systems
boundaries
and
modelling of
the life cycle
Allocation
51
In standard part 1, inventory data are presented for the whole life cycle, and
detailed step by step (production, transportation, implementation, utilisation and
end of life), for the total life of the product, and for an average year. Those
inventory data concern energy resources consumption, non-energy resources
consumption, emissions to air, water and soil, and production of waste. An
extract of the format is presented in appendix.
In standard part 2, environmental impact indicators are presented, and
information on the contribution of the product to control health risk and comfort
aspects in the building.
See status above.
Any scheme, based on LCI/LCA needs at least the performing of an LCA. There
are different reflections now in France (see ADEME, DRIRE, etc.) to study how
to help SMI to perform such LCA/LCI at lower costs.
AFNOR experimental standard XP P 01-010-1 has been developed in
compliance with ISO TR 14025 (XP P01-010 is a sector-based application of
ISO TR 14025). It is in compliance with ISO 14040, 41, 42 and 43.
The standard part 1 and its annex gather definitions, methodology choices,
assumption and examples that let the methodology be transparent.
The functional unit is defined in the context of use of the product in a given
application in a building.
There is no average typical building for all construction products. However, the
definition of the FU requires the definition of a building where the building is
implemented. The choice of the building should correspond to the main
application of the product in buildings (dwellings, or offices, or industrial
buildings, etc.)
2
2
The functional unit is defined (for instance 1 m or 100 m , or else, of usage of
the product in a building), with specific technical characteristics (e.g. light
transmission factor, heat losses, sound insulation, etc.).
The functional unit also takes into account an average year of use, which
corresponds to the total impacts of the product during its life cycle (including
maintenance), divided by lifetime of the product.
The functional unit might precise that the product is used in France, or in
Europe (importance for transportation distances and energy modelling).
The declaration might cover a specific product from a specific producer. It might
also be a product group from associated producers and sellers in France of
those products. The declaration must concern an actual product. This does not
exclude producers to perform further calculation on products under
development and use the reference actual product to assess the improvement.
The cradle to grave life cycle is covered: production of the product and its raw
material, packaging and transportation to the building site, implementation in the
building, utilisation including maintenance and end of life of the product.
Cut-off rules: mass cut-off rule of 95% of input flows is applied. This does not
apply if dangerous substances (according to Directive 67/548/EEC) are used in
the manufacture of the product.
Transportation distances and means of transportation correspond to the
average situation of distribution of the product by the producers in France.
Modelling of the use phase (1): maintenance of the product during the use
phase is included in the system boundaries. Energy consumption for heating the
building during the use phase is excluded. Energy savings allowed by the
product among the life cycle of the building, if they are included in the system
boundaries, must be presented very clearly and in full transparency.
Modelling of the use phase (2): specific information is required in order to take
into account indoor environment. These are presented separately from the LCI
data. Part 2 of standard requires information on health risk management and
indoor comfort.
Modelling of service life, replacements and maintenance: replacements and
maintenance of products are included in the system boundaries (see above).
These are based on both technical requirements provided by the producer, and
practical knowledge on life of products in buildings.
Modelling end-of-life scenarios: based on actual national scenario for the
outcome of products at the end of life. The default scenario defined in the
standard is land filling. The landfill model generally used in the declarations
corresponds to an inert waste landfill, with partial leaching.
Exclusion of capital goods
Exclusion of transport of personnel
Modelling of co-products: the hierarchy proposed follows the ISO 1404x, and
ISO 14049 (draft) series requirements :
avoid allocation, either by collecting more detailed data, or extend the system
June 2005
Main
indicators
underlying
the scheme
Data sources
Data quality
requirements
52
boundaries;
if allocation cannot be avoided, prefer allocation on a physicochemical
relationship (mass, energy content, etc.).
Modelling of product recovery or recycling, either during the production process
or at the end of life;
if it is closed loop recycling or re use : no specific methodological treatment;
if it is open loop, either extension of system boundaries (if recycled once), either
use a calculation rule that takes into account the number of recycling.
Part 1 of the standard produces Life Cycle Inventory data.
Part 2 of the standard includes some indicators, common for all construction
products:
some inventory flows (energy resources consumption, non energy resources
consumption, water consumption, waste production);
climate change, calculated from CO2, CH4 and N2O emissions, and using CML
2000 characterisation factors;
acidification, using CML 2000 method;
air pollution, using an equivalency calculation performed with limited level of
regulated emissions;
water pollution using an equivalency calculation performed with limited level of
regulated emissions.
Part 2 of the standard also includes some indicators that might be relevant only
for some construction products:
soil contamination (qualitative);
ozone layer depletion, using CML 2000 method;
photochemical oxidant formation, using CML 2000 method;
biodiversity (transparent information to be provided).
Part 2 of the standard also includes health risk characteristics and contribution
of the product to internal comfort (see above).
Air pollution and water pollution indicators are linked with French regulations
(threshold level of emissions).
Hazardous substances, according to Directive 67/548/EEC, should appear in
the complete inventory of the part 1 of the standard.
The standard specify that no cut-off rule can be applied on hazardous
substances.
However, hazardous substances do not appear as core indicators in the results.
Health and safety issues are taken into account by two means in the standard:
in part 1, air, water, and soil emissions are provided at two levels for the
implementation and utilisation steps : as part of the whole life cycle (e.g.
upstream emissions from the production of the glue, or electricity to clean ),
and as well as specific emissions for health and safety issues for the workers
(emissions when gluing) and the inhabitants. The latest should be documented
by studies performed by the industry on the behaviour of their products in
buildings. That might include the risk approach, which supposes a transparent
scenario to be defined to be in accordance with ISO 14020.
in part 2, with the data on health risk characteristics and contribution of the
product to internal comfort.
Part 1 of the standard propose reference data for generic data:
for electricity, it corresponds to French electricity model. The standard provides
with data on the breakdown of energy sources in France in 1998, and energy
efficiency of the power station;
for fossil fuel, NCV are provided;
reference inventory for the supply and combustion of main fuels are also
provided in the standard. Those data are based on ETHZ and Ecobilan work on
nuclear fuel cycle. Data are provided for light fuel oil, heavy fuel oil, lignite, coal
and natural gas.
For upstream data (raw material used to produce the building product), the
request for specific data from the furnisher of the producer should be tries
whenever possible. Otherwise literature data generally accepted in LCA are
used (APME, Buwal, ETHZ, FEFCO, IISI, etc.)
No generic model is proposed for end of life landfilling.
Data specific to the process of production come from the industry that launches
the declaration, either from a single producer, either average data when the
declaration is performed by an association of producers.
Data quality is ensured by the level of transparency required on the study (data
sources, cut off rules, etc.). Moreover, the producer must provide explicit
information of data quality.
Specific known emissions from the producer process must be described in any
cases (even with estimations; no data gap allowed).
June 2005
53
All producer information shall be justified (part 1) and measures, controls, etc.
performed by laboratories (for example) should be indicated (with the reference
document that was used).
When the LCA is commissioned to an LCA expert, data quality process within
its company provides useful information.
Data representativeness is dealt in the standard, requiring for data in
accordance with the functional unit and system boundaries: geographical, time
related and technological representativeness.
In case of group averages, what has been done is a mass balance based on
volume of production between data of each producer. When such average are
performed, the rules of calculation that have been used are made clear in the
declaration (in accordance with ISO 14020).
For completeness, the input data should be complete. However, a 95% cut off
rule is allowed throughout the lifecycle (except for dangerous substances,
according to Directive 67/548/EEC).
10.3
10.4
initiated to cover areas that will not be agreed or elaborated within the ISO
committees. The works undertaken in this mandate are as follows:
Section 1: Framework Standard
l A framework standard for integrated environmental building framework, which
is intended to provide the methodology for the assessment and the subsequent
declaration of the integrated environmental performance of complete buildings
and construction works.
l A horizontal standard on the aggregation of LCA results of individual materials
into the building.
Section 2: Building Products and Materials Related Standards
l A horizontal standard on the LCA methodology for building products/materials
including data quality of LCI data
l A horizontal standard on the communication format/EPD: Business-to-business.
June 2005
54
10.5
Target Date of
Completion
2007-07
2008-02
2009-05
Task Group 3:
Construction and
Demolition Waste
Management
Summary
The environmental impacts of materials, and the main preventative and
remedial measures already in place are listed.
Analysing what the construction materials industry has achieved in
improving its environmental performance.
Recommendations on how the industry can further improve are made.
The objective of this strategy paper is to accelerate the installation of
appropriate energy efficiency measures in all kinds of existing and new
buildings, including specific actions for common and co-ordinated policies
and measures at community, Member State and industry level.
The main purpose is to provide recommendations to the WG Sustainable
Construction on how to improve construction and demolition waste
management.
June 2005
11
55
11.1
June 2005
56
June 2005
57
The system boundaries determine which unit processes to be included in the LCA
study. Subjective judgement is sometimes required to define the system boundaries
in the initial stage. The following boundaries can be considered:
l Boundaries between the technological system and nature. A life cycle usually
begins at the extraction point of raw materials and energy carriers from nature.
Final stages normally include waste generation and/or heat production.
l Geographical area. Geography plays a crucial role in most LCA studies, e.g.
infrastructures, such as electricity production, waste management and transport
systems, vary from one region to another. Moreover, ecosystems sensitivity to
environmental impacts differs regionally too.
l Time horizon. Boundaries must be set not only in space, but also in time.
Basically LCAs are carried out to evaluate present impacts and predict future
scenarios. Limitations to time boundaries are given by technologies involved,
pollutants lifespan, etc.
l Boundaries between the current life cycle and related life cycles of other
technical systems. Most activities are interrelated, and therefore must be isolated
from each other for further study. For example production of capital goods,
economic feasibility of new and more environmentally friendly processes can be
evaluated in comparison with currently used technology.
Data quality requirements
The accuracy and reliability of the results from LCA studies relies on the extent to
which data quality requirements are met. The following parameters should be taken
into account:
l Time-related coverage.
l Geographical coverage.
l Technology coverage.
l Precision, completeness and representativeness of the data.
l Consistency and reproducibility of the methods used throughout the data
collection.
l Uncertainty of the information and data gaps.
Allocation
The processes usually contain more than one function or output. The environmental
load of a process should be allocated over the different functions. The following
recommendations are available for allocation:
l Wherever possible, allocation should be avoided, by splitting the process in such
a way that it can be described as two separate processes that each has a single
output.
l Where allocation is not avoidable, inputs and outputs should be partitioned
between its different functions or products in a way that reflects the underlying
physical relationships between them.
l If the latter is not possible, allocation should be carried out based on other
existing relationships (e.g. in proportion to the economic value of products).
The last option is usually used, since it conveniently relates waste to the economic
outputs, and it states the relative importance of an output.
June 2005
11.3
58
June 2005
59
Optional elements:
l Normalisation: The magnitude of the category indicator results is calculated
relatively to reference information, e.g. the CO2 emission in year 2000 is used as
a base line to assess the CO2 emission in the future. The existing value can be
divided by the base value for obtaining an index value.
l Weighting: Indicator results coming from the different impact categories are
converted to a common unit by using factors based on value-choices. Weights
are usually assigned subjectively, and the values sometimes cause controversies,
especially for the mid-point assessment methods (see Chapter 12 for mid-point
assessment methods), since the number of indicators to be evaluated is usually
large.
l Grouping: The impact categories are assigned into one or more groups sorted
after geographic relevance, company priorities etc.
11.5
12
June 2005
60
requirements and sources of LCI data (LCI) and the life cycle impact assessment
(LCIA) methods available. Apart from the ISO 14040 series, a useful guideline on
LCA has been published by European Energy Commission (1997).
12.1
Indicator
Statistical representivity
Age of data
Acquisition method
Completeness
Representivity
Repeatability
Variability
Remarks
The size of population or the length of time
in the measurement
How old is the data?
Actual measurement or theoretical
calculation.
The inclusion of all signication flow.
How are the flows aggregated?
June 2005
61
only contain national data. The available LCI databases usually also provide the
facility for life cycle impact assessment (LCIA) based on the common assessment
methodologies, such as Eco-indicator 99 and CML 2001.
12.2.1
Ecoinvent
The ecoinvent database (URL7) covers more than 2500 processes for areas,
including energy, transportation, waste disposal, construction, chemicals,
detergents, paper and board, agriculture and waste management. It is the most
widely used LCI database in Europe, and the data are valid for Swiss and Western
European conditions. The different categories of data are updated and maintained
by different Swiss institutions (Figure 12.2).
EMPA SG
FAL
- Plastics
- Paper & cardboard
- basic chemical
- detergents
- Waste treatment
(644 DS)
- Agriculture (253
DS)
PSI
- Energy supply
-> Fuel
-> Electricity
-> Heat
(1243 DS)
EMPA Du
- Metals
- Building materials
- Wood & forestry
- Basic chemicals
(359 DS)
Central Database
(2637 DS)
ETHZ ICB
ETHZ UNS
Gabi 4
GaBi 4 Professional database (URL8) includes approximately 650 sets of data,
compiled by IKP/PE. The data were developed based on the cooperation with
industries, patent and technical literature. The areas covered include metals, organic
and non-organic pre-products, synthetics, minerals, provision of energy (steam,
thermal energy, electricity mixes and power stations), end of life and disposal
processes. 15 extension database modules for specific needs are also available for
purchase individually.
12.2.3
IVAM
The IVAM database (URL9) consists of about 1350 processes, leading to more than
350 materials. The data can be used for LCA applications in various sectors. In the
data, material production is further split into individual process sub-steps. The
June 2005
62
majority of the LCI data were gathered during previous LCA research by IVAM,
and most of the data are applicable to Western Europe.
12.2.4
Boustead Model
The Boustead Model (URL10) is a computer modelling tool for lifecycle inventory
calculations. There are three main groups of files: the program files, the core data
files, and the top data files, as shown in Figure 12.3.
Figure 12.3: Structure of the Boustead Model showing the three main groups of
files.
The program files consist of user interfaces to accept inputs and to show outputs.
The top data files are used to store the information for unit operations created by the
user. The user usually creates the data, which are not readily available in the core
database. The core data files contained information on a range of different fuel
production and materials processing operations. Table 12.2 shows the files kept in
the core.
Table 12.2 Files stored in the core of the Boustead model.
File
Fuel
production
Description
The records in this file contain fuel production data for almost all of the countries around
the world as well as data for the different regions of the USA and Canada.
Materials
processing
Standalone data
The records in this file contain actual production data for a wide variety of materials
processing and transport operations.
The records in this file contain information on materials production operations, usually
averaged over a number of different production plants. This type of information usually
refers to bulk commodity materials, which are bought on the open market but the source
is usually unknown.
The records in this file contain the names of the air emissions used in the materials
processing, fuel production and stand-alone operations.
The records in this file contain the names of the water emissions used in the materials
processing, fuel production and stand-alone operations.
The records in this file contain the names of the solid waste categories used in the
Air
emissions
Water
emissions
Solid waste
June 2005
63
materials processing, fuel production and stand-alone operations. This is an empirical list
containing the main categories of solid waste that can usually be identified by process
operators. It essentially identifies the wastes that are generated by the process.
EU solid
waste
Raw
materials
Fuels
Feedstocks
Functions
This file therefore lists all of the EU categories published by the EC. This file essentially
categorises the solid wastes by the way in which they may be handled and subsequently
used for other purposes.
The records in this file contain the names of the raw materials used in the materials
processing, fuel production and stand-alone operations.
The records in this file contain the names of the fuel types used in the materials
processing, fuel production and stand-alone operations.
The records in this file contain the names of the feedstock types used in the materials
processing, fuel production and stand-alone operations.
The records in these files are essentially instructions to force the computer to manipulate
data in specific ways. The use of these functions is discussed in more detail later.
The database within the model holds information on a large number of unit
operations. A unit operation is defined as a process which produces a single product.
Reference to any unit operation is made using the code number of the record as a
reference.
12.3
June 2005
l
l
l
l
64
Health inequality: (a) infant mortality (by socio-economic group) (b) life
expectancy (by are) for men and women
Mobility: (a) number of trips per person by mode (b) distance travelled per
person per year by broad trip purpose
Social justice
Environmental equality
Well being
Eco-indicator 99
Eco-indicator 99 (Goedkoop and Spriensma, 2000) is a damage oriented method,
since its impact category indicators are defined close to three damage categories, i.e.
Resources, Ecosystem Quality, and Human Health (Figure 12.4). The method is
made up of three steps:
l Damage factors for the pollutants or resource uses are calculated for the impact
categories.
l Normalisation of the impact factors.
l Weighting of the three damage categories and calculation of weighted Ecoindicator 99 damage factors.
The weights for the damage categories are proposed in the Eco-indicator report.
Nevertheless, without the last step, the outputs for three categories will be
presented.
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65
CML 2001
CML 2001 is a midpoint method (Goedkopp et al., 2006). The impact category
indicators selected are relatively closer to the LCI emission. The indicators in CML
include acidification potential, climate change, eutrophication potential, freshwater
aquatic ecotoxicity, freshwater sediment ecotoxicity, human ecotoxicity, marine
sediment ecotoxicity, photochemical oxidation (summer smog), resources,
stratospheric ozone depletion, and terrestrial ecotoxicity (Althaus, 2004).
12.3.3
EPS 2000
The EPS 2000 impact assessment method (URL12) is the default method in the EPS
system, which is used for comparing products in the product development process.
It is a damage-oriented method, and adopts a top-down approach, i.e. more
important issues are considered first, followed by less important ones. The
following five safe guard categories are selected: human health; ecosystem
production capacity; biotic stock resources; bio-diversity; and cultural and
recreational values.
The assessment makes use of indexes. The inventory results of individual flows for
an activity will be multiplied by pre-fixed weighting factors, and summed up to
produce a single total value. The prefix weighting factors have the units of
Environmental Load Units (ELU) according to the willing to pay (WTP) to restore
impact on the safeguard subjects as an OECD inhabitant. Hence, ELU can be
measured in the monetary term, and 1 ELU is assumed equivalent to 1 Euro.
12.3.4
IMPACT 2002+
The IMPACT 2002+ LCIA methodology (Jollient et al., 2003) proposes a feasible
implementation of a combined midpoint/damage approach. It links all types of LCI
results via 14 midpoints to four damage categories (Figure 12.5). New concepts and
methods have been developed in IMPACT 2002+, especially for the comparative
assessment of human toxicity and ecotoxicity. Human Damage Factors are
calculated for carcinogens and non-carcinogens, employing intake fractions, best
estimates of dose-response slope factors, as well as severities. The transfer of
contaminants into the human food is no more based on consumption surveys, but
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66
accounts for agricultural and livestock productions levels. Indoor and outdoor air
emissions can be compared and the intermittent character of rainfall is considered.
Both human toxicity and ecotoxicity effect factors are based on mean responses
rather than on conservative assumptions. Other midpoint categories are adapted
from the methods Eco-indicator 99 and CML 2002. all midpoint scores are
expressed in units of a reference substance and related to the four damage
categories: human health, ecosystem quality, climate change, and resources.
Normalisation can be performed either at midpoint or at damage level.
Figure 12.5: The overall scheme of the IMPACT 2002+ framework (adopted from
Jolliet et al., 2003).
12.3.5
EDIP
EDIP97 (URL13) is a midpoint approach covering most of the emission-related
impacts, resource use and working environment impacts with normalisation based
on person equivalents and weighting based on political reduction targets for
environmental impacts and working environmental impacts, and supply horizon for
resources. It is site-generic, and the exclusion of spatial information sometimes lead
to erroneous results. In view of this, EDIP2003 was developed to support spatial
characterisation, and can be used for either site-generic or site-specific modelling
(URL14). It also covers a larger part of the cause-effect. Some of the category
indicators are selected closer to the endpoints. Thus, EDIP2003 lies closer to the
damage-oriented approach.
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67
13.1
June 2005
68
It is necessary to remind that some tools were developed based on the LCC
standards of certain countries. Hence, changes, if allowed in the software package,
must be made if one of these tools is to be adopted in other country.
13.2
13.3
June 2005
69
tools evaluate issues of concern, such as the protection of human health and
ecosystems, and the efficient use of resources.
Most of the LCA tools are computer-based models providing life cycle impact
assessment (LCIA), while others, such as BREEAM, are methodologies available in
the form of reports. With the use of the LCA software tools, the user only needs to
provide the necessary inputs, and does not have to worry about the computation of
performance measures. There are estimated to be over 200 LCA software packages
currently being used. Many LCA tools are commercial products. The tools usually
contain regional product databases for more accurately assessing buildings in the
particular regions. The life cycle inventory database, Ecoinvent, which are
developed and maintained by Swiss Centre for the Life Cycle Inventories, are more
commonly adopted. In the absence of certain required input data, assumptions
available in the tools can be utilised.
Generally, the tools adopt either bottom-up approach or top-down approach in the
assessment process (Erlandsson and Borg, 2003). The former focuses on material
selection, and then assesses the total impact by combining the selected building
materials. The latter first selects the shape and size of a building, followed by
specifying the materials used. Among the LCA tools evaluated in the review, the
bottom-up approach is more commonly used. A 3-level classification system
(Trusty, 1999) has been proposed to classify the LCA tools based on their areas of
application:
l Level 1 refers to product comparison tools and information sources. The tools
are primarily used in the procurement stage, and the examples of Level 1 tools
are BEES and TEAM.
l Level 2 are for whole building decision support tools. The tools are used for
assessing certain area(s) of concern, such as operating energy and life cycle
environmental effects. The tools for Level 2 include EQUER and Envest.
l Level 3 encompasses whole building frameworks, such as BREEAM and
ECOPROFILE. The frameworks make use of the information generated from
the Level 2 tools, and cover broad sustainability aspects such as environment,
economic performance, and social issues.
The tool information is mainly drawn from the literature reviews available on the
internet (URL16; URL17: URL18), the product websites, and the evaluation of
available demonstration versions of LCA tools. The purpose of the review is to give
the reader a general idea about the tools in terms of their type, area of application,
input required, and output generated. The information of the following LCA tools is
provided in Appendix A:
l Environmental Impact Estimator 3.0 by Athena (http://www.athenasmi.ca/);
l BEAT 2002 (http://www.sbi.dk/en/publications/programs/beat-2002);
l BEES 3.0 (http://www.bfrl.nist.gov/oae/software/bees.html);
l BREEAM (http://www.breeam.org/);
l CASBEE (http://www.ibec.or.jp/CASBEE/english/index.htm);
l CEEQUAL (http://www.ceequal.com);
l Eco-Quantum (http://www.ivam.uva.nl/uk/index.htm);
l Ecoprofile (http://www.ecoprofile.com);
l ECOTECT (http://www.squ1.com);
l ENVEST (http://envest2.bre.co.uk);
l EQUER (http://www-cenerg.ensmp.fr);
June 2005
l
l
l
l
l
l
l
l
l
l
l
14
70
GaBi 4 (http://www.gabi-software.com);
GBTool (http://www.iisbe.org);
GREENCALC (http://www.greencalc.com);
HQE Process (http://assohqe.org);
LCAid (http://www.projectweb.gov.com.au/dataweb/lcaid/);
LISA (http://www.lisa.au.com);
LEED (http://www.usgbc.org/LEED/publications.asp);
LEGOE (http://www.legoe.de);
OGIP (http://www.crb.ch);
SimaPro 7.0 (http://www.pre.nl/pre/pre_consultants.htm);
TEAM for Building (http://www.ecobalance.com/index_uk.html).
June 2005
71
Eco-costs for different phases in the life cycle of a building should be quantified.
However, the required environmental cost information may not be readily available.
An environmental cost database that has the appropriate data structure for LCC
should be developed for facilitating the tedious LCC process.
Another approach is to use multi-criteria decision making system for assessing
projects. Tupamaki (2005) mentioned the incorporation of Logical Decisions 5.1,
which is a software package for multi-criteria decision-making, in EuroLifeForm for
assessing both environmental and cost impacts of projects.
Sterner (2002) developed a multi-attribute tender evaluation model. The two
attributes to be considered alongside the tender price are life cycle energy cost and
its associated environmental impact, which is represented by the environmental
index (EIX) (equation [14.2]). The approach requires the conversion of
environmental index to cost. The conversion requires some subjective conversion
factors, and the results will be dependent on the users attitude.
TCT = f ( p, LCC E , EI X )
[14.2]
Where
TCT = total tender price;
p
= environmental index.
[3]
The eco-cost of a product is calculated by multiplying the cost elements with the
relevant EVRs. These specific EVRs have been computed on the basis of LCAs.
15
June 2005
72
There is an enormous amount of literature which relates to LCC and LCA. Some of
it (particularly academic papers) develops numerous models of high level of
technical complexity but displaying a rather low level of practicality. After
investigating existing practices and case studies within Davis Langdon as well as
talking to other cost consultancies (all using their unique house-developed cost
models), it was discovered that the scope and range of information which clients
find useful and need from the LCC calculations is not that extensive.
The methods of financial evaluation concentrate on calculating and analysing NPV,
NPV, IRR/AIRR, SIR/BCR, NB/NS, basic sensitivity analysis, and top level risk
assessment.
Discount rate and its influence on the outcome of the LCC calculations is another
factor which is mentioned in almost all literature. However the reality is that the
publicly procured projects predominantly use discount rate set by national
governments/treasury/banks, (e.g. UKs current one is 3.5%). The private
procurement use discount rates between 2-14%, however as the methodology is
concerned with public projects, the issue of selection of the discount rate tends to be
resolved.
The still open topic is the quality of data which goes into the LCC models. The
facility data (environmental, performance and cost) is provided by variety of
organisations. It is often incomplete and in variety of incomparable formats. The
main sources of the facility data are listed in 6.3.
In order for the methodology to provide comparable results and outputs a significant
amount of work is needed to normalise data in existing sources across the member
countries. It needs to be continuously updated.
Risk evaluation has been researched and analysed in great details, clear division of
methods into qualitative (risk registers, matrices, etc.) and quantitative
(mathematical modelling of uncertainty) gives forecasters powerful tools. Clients,
however use mainly sensitivity analysis results calculations using
likelihood/probability of projected values within pre-determined ranges and Monte
Carlo simulation.
Motive scenarios and analysis of a range of service lives is usually considered as the
most informative and useful.
Data for LCA and sustainability assessment is widely available and quite extensive.
Clients however still are mainly concerned with CO2 emissions and energy use as
the two main environmental indicators.
16
References
Akintoye, S. A. and MacLeod, J. M. (1997) Risk analysis and management in
construction. International Journal of Project Management, 15(1), 31-38.
Al-Hajj, A. and Horner, M. W. (1998) Modelling the running cost of buildings.
Construction Management and Economics, 16(4), 459-470.
American Society for Testing Materials (ASTM) (1989) Standard Practice for
measuring Life-Cycle Costs of Buildings and Building Systems. E 917-89, ASTM
Philadelphia.
June 2005
73
American Society for Testing Materials (ASTM) (2002) Standard Practice for
measuring Life-Cycle Costs of Buildings and Building Systems E 917-02, ASTM,
Philadelphia.
Association for Project Management (APM) (1997) PRAM: Project Risk Analysis
and Management Guide, The APM Group, UK.
Blanchard, B. S. and Fabrycky, W. J. (1990) Systems Engineering and Analysis,
Prentice-Hall, New Jersey.
Boussabaine, A. and Kirkham, R. (2005) Whole Life-cycle Costing: Risk and Risk
Responses, Blackwell Publishing, Oxford, UK.
Bromilow, F. J. and Pawsey, M. R. (1987) Life cycle cost of university buildings.
Construction Management and Economics, 5(4), S3-S22.
Chapman, R. J. (1998) The effectiveness of working group risk identification and
assessment techniques. International Journal of Project Management, 16(6), 33343.
Chau, K. W. (1995a) The validity of the triangular distribution assumption in Monte
Carlo simulation of construction costs: empirical evidence from Hong Kong.
Construction Management and Economics, 13(1), 15-21.
Chau, K. W. (1995b) Monte Carlo simulation of construction costs using subjective
data. Construction Management and Economics, 13(5), 369-83.
CEN/TC 350 WI 350001 (2006) Sustainability of construction works framework
for assessment of buildings (working document for European Standard).
Christensen, P. N., Sparks, G. A. and Kostuk. K. J. (2005) A method-based survey
of life cycle costing literature pertinent to infrastructure design and renewal, Can. J.
Civ. Eng., 32, 250-259.
CIB (1999) Agenda 21 on Sustainable Construction, CIB Publication Report 237,
Rotterdam, Netherlands.
CIB (2004) State-of-the-Art Report on Performance Based Methods for Service Life
Prediction Part A & Part B, CIB Report Publication 294.
Clemen, R.T. (1996) Making hard decisions: an introduction to decision analysis
2nd ed., Duxbury Press, Pacific Grove, Calif.
Cole, R. J. and Sterner, E. (2000) Reconciliatory theory and practice of life-cycle
costing. Building Research and Information, 28(5/6), 368-375.
Construction Industry Research and Information Association (CIRIA) (1996)
Control of Risk: A Guide to the Systematic Management of Risk from Construction,
CIRIA, London.
Crawley, D. and Aho, I. (1999) Building environmental assessment methods:
applications and development trends. Building Research & Information, 27(4/5),
300-308.
Das, P.C. (2001) Maintenance planning for road pavements and structures
commonality of principles and procedures. In Lifecycle cost analysis and design of
civil infrastructure systems. Edited by D.M. Frangopol and H. Furuta. Structural
Engineering Institute of the American Society of Civil Engineers, 121, Reston, Va.
June 2005
74
DTI (Bourke, K. et al) (2005) Achieving Whole Life Value in infrastructure and
buildings, BRE Bookshop, UK.
Ehlen, M.A. (1997) Life-cycle costs of new construction materials. ASCE Journal of
Infrastructure Systems, 3(4): 129133.
El-Haram, M. A., Marenjak, S. and Horner, M. W. (2002) Development of a generic
framework for collecting whole life cost data for the building industry. Journal of
Quality in Maintenance Engineering, 8(2), 144-151.
Ellram, L. M. (1995) Total Cost of Ownership: An analysis approach for
purchasing. International Journal of Physical Distribution & Logistics
Management, 25(8), 423.
Erlandsson, M. and Borg, M. (2003) Generic LCA-methodology applicable for
buildings, constructions and operation services today practice and development
needs. Building and Environment, 38(7), 919-938.
European Environment Agency (1997) Life Cycle Assessment (LCA): A Guide to
Approaches, Experience and Information Sources, Environmental Issues Series, 6,
European Environmental Agency.
Fabrycky, W.J., and Blanchard, B.S. (1991) Life-cycle cost and economic analysis,
Prentice-Hall, Englewood Cliffs, N.J.
Flanagan, R., Kendell, A., Norman, G. and Robinson, G. D. (1987) Life cycyle
costing and risk management. Construction Management and Economics, 5(4), 5371.
Flanagan, R., Norman, G., Meadows, J. and Robinson, G. (1989) Life Cycle
Costing: Theory and Practice, BSP Professional Books, Oxford.
Frangopol, D.M., Enright, M.P., and Estes, A.C. (1999) Integration of maintenance,
repair, and replacement decisions in bridge management based on reliability,
optimization, and life-cycle cost. Presentations from the 8th International Bridge
Management Conference, Denver, Colo., 2628 April 1999. Vol. II. Transportation
Research Board, National Research Council (U.S.), Washington, D.C.
Glucha, P. and Baumann, H (2004) The life cycle costing (LCC) approach: a
conceptual discussion of its usefulness for environmental decision-making. Building
and Environment, 39, 571-580.
Hastak, M., and Halpin, D.W. (2000) Assessment of life-cycle benefit-cost of
composites in construction. ASCE Journal of Composites for Construction, 4(3):
103111.
Hawk, H. (2003) Bridge life-cycle cost analysis, National Cooperative Highway
Research Program, Transportation Research Board, Washington, D.C. NCHRP
Report 483.
HM Treasury (2000) Her Majestys Treasury Guidance Note 7 on Whole Life Costs
HM Treasury (2003) The Green Book: Appraisal and Evaluation in Central
Government, http://www.hm-treasury.gov.uk./media/785/27/Green_Book_03.pdf.
Hunter K., Hari S. and Kelly J. (2005) A whole life costing input tool for surveyors
in UK local government. Structural Survey, 23(5), 346-358(13),
June 2005
75
Institution of Civil Engineers (ICE) and Faculty and Institute of Actuaries (FIA)
(1998) RAMP: Risk Analysis and Management for Projects, Thomas Telford,
London.
Isaac, I. (1995) Training in risk management. International Journal of Project
Management, 13(4), 225-229.
International Standardisation Organisation (ISO) (1997) ISO 14040: 1997 Environmental management - Life cycle assessment - Principles and framework,
ISO, Geneva.
International Standardisation Organisation (ISO) (1998) ISO 14041: 1998 Environmental management - Life cycle assessment - Goal and scope definition and
inventory analysis, ISO, Geneva.
International Standardisation Organisation (ISO) (2000a) ISO 14042: 2000 Environmental management - Life cycle assessment - Life cycle impact assessment,
ISO, Geneva.
International Standardisation Organisation (ISO) (2000b) ISO 14043: 2000 Environmental management - Life cycle assessment - Life cycle interpretation, ISO,
Geneva.
International Standardisation Organisation (ISO) (2006) ISO 15686-5: Building and
Constructed Assets Service Life Planning: Part 5 - Whole-Life Costing (Draft),
ISO, Geneva.
Jones, P. J. et al. (2000) Planning for a sustainable city: An energy and
environmental prediction model. Journal of Environmental Planning and
Management, 43(6), 855-872.
Keeney, R.L., and Raiffa, H. (1993) Decisions with multiple objectives: preferences
and value tradeoffs, Cambridge University Press, Cambridge, U.K.
Kent, R.M., and Murphy, D.A. (2000) Health monitoring system technology
assessments cost benefits analysis, National Aeronautics and Space
Administration, Langley Research Center, Hampton, Va. NASA/CR-2000-209848.
Kirkham, R. J. and Boussabaine, R. J. (2005) Forecasting the residual service life of
NHS hospital buildings: a stochastic approach. Construction Management and
Economics, 23(5), 521-529.
Kirkham, R. J., Boussabaine, A. H. and Grew, R. J. (1999) Forecasting the cost of
energy in sports centres. Proceedings of the RICS Construction and Building
Research Conference (COBRA 1999), University of Salford, 152-160.
Kirkham, R. J., Alisa, M., da Silva, A. P., Grindley, T. and Brondsted, J. (2004)
Whole life cycle cost and performance model for buildings and civil infrastructure.
Proceedings of the RICS Construction and Building Research Conference (COBRA
2004), Leeds Metropolitan University.
Kishk, M. (2004) Combining various facets of uncertainty in whole-life cost
modelling. Construction Management and Economics, 22(4), 429-435.
Kishk, M., and Al-Hajj, A. (1999) An integrated framework for life-cycle costing in
buildings. Proceedings of the RICS Construction and Building Research Conference
(COBRA 1999), University of Salford, 92-101.
June 2005
76
http://www.ogc.gov.uk/SDToolkit/reference/ogc_library/achievingexcellence
/ae7.pdf.
Office of Government Commerce (OGC) (2005) Successful Delivery Toolkit
http://www.ogc.gov.uk/SDToolkit/reference/ogc_library/achievingexcellence/
Osborn, A. F. (1963) Applied Imagination: Principles and Procedures of Creative
problem Solving, Charles Scribners Sons, New York.
Ozbay K., Parker N., Jawad D., and Hussain S., (2003) Life Cycle Cost Analysis:
State-of-the-Practice vs State-of-the-Art. 83rd Annual Meeting of the
Transportation Research Board,
http://courses.washington.edu/cee404/readings/TRB2004-003115.pdf
Patterson, F. D. and Neailey, K. (2002) A risk register database system to aid the
management of project risk. International Journal of Project Management, 20(5),
365-74.
Paulson, J. (2001) Life Cycle Assessment for Building Products The Significance
of the Usage Phase, Doctoral Thesis, Royal Institute of Technology, Sweden.
Pratt, J.W., Raiffa, H., and Schlaifer, R. (1996) Introduction to statistical decision
theory, The MIT Press, Cambridge, Mass.
Ross, T. J. (1995) Fuzzy Logic with Engineering Applications, McGraw-Hill, New
York.
Ruegg R.T and Marshall H.E (1990) Building Economics: Theory and Practice,
Van Nostrand Reinhold, New York.
June 2005
77
Sarja, A., Bamforth, P., Caccavelli, D., Chevalier, J. and Durucan, S. (2005)
Lifetime project cluster: Lifetime Engineering of Buildings and Civil
Infrastructures, Deliverable 3.1 Generic description of lifetime engineering.
Smith, N. J. (1999) Managing Risk in Construction Projects, Blackwell Science,
Oxford.
Sobanjo, J. O. (1999) Facility life-cycle cost analysis based on fuzzy sets theory.
Proceedings of 8th International Conference on Durability of Building Materials
and Component, Vancouver, 1798-1809.
Sterner, E. (2002) Greener Procurement of Building: Estimation of Environmental
Impact and Life-cycle Cost, Doctoral Thesis, Lulea University of Technology,
Sweden, http://epubl.ltu.se/1402-1544/2002/09/LTU-DT-0209-SE.pdf.
Stewart, R.D. (1995) Fundamentals of cost estimating. In Cost estimators reference
manual. 2nd ed. Edited by R.D. Stewart, R.M. Wyskida, and J.D. Johannes, 1-40,
Wiley and Sons, New York.
Tao, Z., Ellis, J.H., and Corotis, R.B. (1994) Reliability-based life cycle costing in
structural design. Proceedings of the 6th International Conference on Structural
Safety and Reliability, Innsbruck, Austria, 913 August 1993. Edited by G.I.
Schuller, M. Shinozuka, and J.T.P. Yao. A.A. Balkema, Rotterdam. pp. 685692.
Task Group 1 (TG1) (2000) Report of Task Group 1: Environmental Friendly
Construction Materials (EFCM), Working Group for Sustainable Construction, the
European Commission,
http://ec.europa.eu/enterprise/construction/suscon/sustcon.htm.
Task Group 2 (TG2) (2000) Report of Task Group 2: Energy Efficiency in
Buildings, Working Group for Sustainable Construction, the European Commission,
http://ec.europa.eu/enterprise/construction/suscon/sustcon.htm.
Task Group 3 (TG3) (2000) Report of Task Group 3: Construction and Demolition
Waste Management, Working Group for Sustainable Construction, the European
Commission, http://ec.europa.eu/enterprise/construction/suscon/sustcon.htm.
Task Group 4 (TG4) (2003) Report of Task Group 4: Life Cycle Costs in
Construction, the European Commission,
http://ec.europa.eu/enterprise/construction/suscon/tgs/tg4/lccreport.pdf.
Townley, P.G.C. (1998) Principles of cost-benefit analysis in a Canadian context,
Prentice-Hall, Toronto.
Trust, W. B. (2000) Introducing an assessment tool classification system. Advanced
Building Newsletter, 25, 18.
Tupamaki, O. (1998) Construction Can!, ENCORD, http://www.villareal.com.
Tupamaki, O. (2005) LCC and Service Life Planning: ISO15686 is Coming, Villa
Real, Finland, http://www.villareal.com.
URL1: Task Group 4: Life Cycle Costs in Construction,
http://ec.europa.eu/enterprise/construction/suscon/tgs/tg4/lccreport.pdf.
URL2: Procurement Guide 07: Whole-Life Costing and Cost Management,
http://www.ogc.gov.uk/embedded_object.asp?docid=1004766.
June 2005
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June 2005
79
June 2005
80
Developer
Availability
Areas of
Application
General
ACEIT
Tecolote
Reseach Inc.,
USA.
www.aceit.com
Commercial
(Windows)
Ampsol
Ampsol Ltd., UK
www.ampsol.co
m
Free (webbased)
Buildings
Bid-Builder
Bid-Builder Ltd,
UK. www.bidbuilder.co.uk
Commercial
(Windows)
Construction
projects (including
PFI/PPP)
Inputs
Outputs
Risk
Remark
- It is a generic LCC tool.
- A spreadsheet is used for presenting
the cost structure and defining input
values.
- Equations are formulate to represent
the relationships among variables.
- It only performs simple LCC
calculation.
- It cannot compare different designs.
NPV
SA,
MCS
NPV
None
NPV, net
capital cost,
annual life
cycle spend
None
June 2005
Software
BLCC 5.3
BridgeLCC
2.0
Kostenrefer
entiemodel
LCCID
Relex LCC
Developer
Availability
National Institute
of Standards and
Technology,
USA
http://www.eere.
energy.gov/
National Institute
of Standards and
Technology,
USA
http://www.bfrl.n
ist.gov/bridgelcc/
welcome.html
Stichting
Bouwresearch,
Netherland
http://www.sbr.n
l/
Free
(platformindependent
)
Building
Systems
Laboratory, US
http://www.wbd
g.org/tools/lccid.
php
Relex, US
www.relexsoftw
are.co.uk
Areas of
Application
Energy and nonenergy projects
81
Inputs
Outputs
Risk
Remark
None
Free
(Windows)
Bridge construction
NPV
MCS,
SA
Windows
Residential
buildings
NPV
None
Free
(Windows)
Costs of acquisition,
maintenance, and refurbishment,
and discount factor are required.
Energy price escalation rates can
also be entered.
NPV
None
Commercial
(Windows)
NPV
SA
June 2005
Software
Developer
Availability
Areas of
Application
Buildings (for rent)
82
Inputs
Outputs
Risk
Remark
The landlords
and the
tenants annual
costs in MOM
None
LCProfit
Statsbygg,
Norway
http://www.stats
bygg.no
Free (MS
Excel)
LCCWare
3.0
Isograph Inc.,
US
http://www.isogr
aphsoftware.com/ind
ex.htm
Commercial
(Windows)
A generic LCC
model (can be
applied to
buildings)
NPV
SA
PARAP
Delft University
of Technology,
Netherlands.
http://www.bk.tu
delft.nl/reh/projects/parap/
Web-based
(demo
version is
available)
Building cost
calculation
N/A
RealCost
2.1
Department of
Transportation,
US
http://www.fhwa
.dot.gov/infrastru
cture/asstmgmt/r
c2104.htm
Free (MS
Excel VBA)
Pavement projects
Required
function area,
usable area,
letable area,
gloss floor
area, capital
costs.
NPV
MCS
Where MOM = Management, operation, and maintenance; MCS = Monte Carlo simulation; Pdf = Probability distribution function; SA = Sensitivity analysis;
NS = Net savings; SIR = Savings-to-investment ratio; IRR = Internal rate of return; SPB = Simple payback; DPB = Discounted payback.
June 2005
83
http://www.athenasmi.ca/
Aim of
Application:
Availability:
Targeted
users:
Level:
Approach:
Database:
Input:
Output:
It enables LCA-based analysis of design and material choices for commercial buildings.
Windows (commercial) a demo version is available.
Architects, engineers, designers, environmental consultants.
2
Bottom-up.
It contains details North American (primarily Canadian) life cycle inventory databases for
specific structural assemblies of different material types and configurations, and for a
variety of building envelope components and materials.
The quantities and types of building components are specified. Depending on the
assembly, the user may have to answer prompts about design information.
Environment impacts in terms of energy consumption, air pollution index, water pollution
index, solid waste emissions, global warming potential, and resource use can be shown
in tables or graphs. Alternative designs can be compared.
Remarks:
BEAT 2002
Developer:
Aim of
Application:
Availability:
Targeted
users:
Level:
Approach:
Database:
Input:
Output:
Remarks:
BEES 3.0
Developer:
Aim of
Application:
Availability:
Targeted
users:
Level:
Approach:
Database:
Input:
Output:
June 2005
Remarks:
84
- It considers multiple environmental and economic impacts over the entire life of the
building product.
- The economic performance is measured using ASTM E917 for life-cycle cost.
- It is only applicable to LCA and LCC in the USA.
BREEAM
Developer:
Aim of
Application:
Availability:
Targeted
users:
Level:
Approach:
Database:
Input:
Output:
Remarks:
BRE, UK.
http://www.breeam.org/
It is a methodology for assessing the performance of buildings in the following areas:
management, energy use, health and well-being, pollution, transport, land use, ecology,
materials, and water.
Guidelines (commercial).
Developers, designers, property agents, owners, planners.
3
None.
Credits are awarded in each area according to performance. A set of environmental
weightings are used to produce a single overall score.
The building is rated on a scale of PASS, GOOD, VERY GOOD or EXCELLENT, and a
certificate will be awarded.
- Different versions are available for offices, home, industrial units, retail units and
schools.
- BRE provides the training for those who wish to become qualified BREEAM assessors.
CASBEE
Developer:
Aim of
Application:
Availability:
Targeted
users:
Level:
Approach:
Database:
Input:
Output:
Remarks:
CEEQUAL
Developer:
Aim of
Application:
Availability:
Targeted
users:
Level:
Approach:
June 2005
Database:
Input:
Output:
Remarks:
85
None.
The assessor completes a questionnaire with 180 questions, which carry scores,
covering 12 topic areas such as use of materials and waste management. Using the
CEEQUAL Scoresheet, the assessor completes the "Initial Assessment Score" column
for each of the 180 questions. On completion of the questionnaire a Verifier checks the
scores and either approves or amends the Assessor's score.
The Award thresholds, based on the maximum possible score for that project as scoped
by the Assessor and Verifier, are:
Exceeded by 25% Pass
Exceeded by 40% Good
Exceeded by 60% Very Good
Exceeded by 75% Excellent (the actual score is given on the Award Certificate.)
- CEEQUAL is similar to BREEAM for buildings, but is for civil engineering projects.
Eco-Quantum
Developer:
IVAM, Netherlands.
http://www.ivam.uva.nl/uk/index.htm
Aim of
Application:
Availability:
Targeted
users:
Level:
Approach:
Database:
Input:
Output:
Remarks:
It is a tool for determining the environmental performance of a residential building over its
total life span.
Windows (in Dutch)
Architects, designers, and local governments.
2
Bottom-up
It contains the Dutch inventory database.
It requires the types of material and actual quantities for the building components.
A set of environmental performance measures are aggregated into 4 environmental
scores: resources, emissions, energy and waste.
- The database cannot be extended by the user.
- Detailed data on building materials used are required. The information may not be
available in the initial design stage.
Ecoprofile
Developer:
Aim of
Application:
Availability:
Targeted
users:
Level:
Approach:
Database:
Input:
Output:
Remarks:
ECOTECT
Developer:
Aim of
Application:
Availability:
Targeted
users:
Level:
Approach:
Database:
Input:
June 2005
Output:
Remarks:
86
ECOTECT's own analysis functions use a wide range of informative graphing methods
which can be saved as Metafiles, Bitmaps or animations. Tables of data can also be
easily output. For more specific analysis or validation you can export to; RADIANCE, POV
Ray, VRML, AutoCAD DXF, EnergyPlus, AIOLOS, HTB2, CheNATH, ESP-r, ASCII Mod
files, and XML.
- It is mentioned as one of the few tools in which performance analysis is simple, accurate
and most importantly, visually responsive.
- It performs LCC.
ENVEST
Developer:
Aim of
Application:
Availability:
Targeted
users:
Level:
Approach:
Database:
Input:
Output:
Remarks:
BRE, UK.
http://envest2.bre.co.uk/
It is a software tool that simplifies the complex process of designing buildings with low
environmental impact and whole life costs. It allows both environmental and financial
tradeoffs to be made explicit in the design process, allowing the client to optimise the
concept of best value according to their own priorities.
Web-based (commercial) a demo version is available on the internet.
Architects, designers, environmental/energy consulting firms, authorities, clients, and
research universities.
2
Top-down
It contains the UK Database of Environmental Profiles of Construction Materials and
Components
Simple data about building form, materials, components and operating systems are
required.
The environmental performance measures are normalised, weighted, and aggregated to
produce a single score, called Ecopoint. 100 Ecopoints are equivalent to the annual
environmental impact caused by a typical UK citizen.
- It is a LCC/LCA tool.
- Minimal data are required through the simple input screens.
- Two versions are available: a) Envest 2 estimator, in which cost and replacement are
prefixed, and cannot be seen or changed by the user; b) Envest 2 calculator, which allows
the user to enter his own cost/replacement interval or use the defaults.
EQUER
Developer:
Aim of
Application:
Availability:
Targeted
users:
Level:
Approach:
Database:
Input:
Output:
Remarks:
GaBi 4
Developer:
Aim of
Application:
Availability:
Targeted
users:
June 2005
Level:
Approach:
Database:
Input:
Output:
Remarks:
87
1
Bottom-up
GaBi 4 professional ecoinvent contains GaBi 4 professional database plus Swiss
ecoinvent database.
A balance (i.e. the results of a comprehensive balance) primarily consists of a list of all
inputs and outputs which results from the life cycle of a product is modelled. The inputs
and outputs in the balance are defined as flows.
The results can consist principally of every table cell of a balance in every conceivable
constellation. Balance tables, balance columns, balance lines, size or evaluation, unit or
normalisation, and also the aggregate level with LCC and life cycle working time value
must be established to specify a result value.
GaBi 4 provides several different Impact Methods including Ecoindicator 95, Ecoindicator
99, Ecological Scarcity Method (UBP), CML 1996 and CML 2001. In total, 63
environmental indicators are included.
- The assessment is based on ISO 14040.
- It can perform SA, MCS and scenario analysis.
- It provides the option for calculating LCC.
GBTool
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GREENCALC
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HQE Process
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LCAid
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2. Resources are the Eco-indicators that describe what resources are used such as water
and energy consumption.
3. Pollutants are Eco-indicators that include pollution impacts on air, water and earth.
- It can work on 3D models created in software such as ECOTECT or AutoCad.
- It allows LCC.
LISA
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BlueScope Steel, BHP Billiton Technology Task leader Glen Dennison, University of
Newcastle, Australia.
http://www.lisa.au.com
LISA (LCA in Sustainable Architecture) is a streamlined LCA decision support tool for
construction. It was developed in response to requests by architects and industry
professionals for a simplified LCA tool to assist in green design.
Windows (free).
Architects, designers, and engineers.
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Bottom-up
Data and equations are provided by nominated users for the case studies.
User can flexibly define the inputs for Specification (analysis period, life expectancies,
number of visitor per hour and so on), Construction (building elements, types and
quantities of materials, or working hours required for different elements), Appliances, Fit
Out, Utilisation, Decommissioning, and Material Transport.
The results contain detailed histograms of the various impacts, such as resource energy
or greenhouse gas emissions. Two bars are graphed, the average NSW impact and the
example set up by the user. Further, more detailed, breakdowns can be viewed by
selecting options from the menu.
- Only case studies can be prepared by nominated developers. It does not allow users to
add new case studies, or modify the existing ones.
- Since it does not have a fixed format, it greatly depends on how the user define the
inputs and equations he wants.
LEED
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LEGOE
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the Ecoinvent data and specific values from the Baustoff Okoinventare.
A building can be described alternatively with 15 macro elements, 40 complex elements,
or approximately 150 simple elements.
It gives a complete, interrelated set of cost, energy, mass-flow and environmental
indicators, such as eutrophication, ozone depletion, and primary energy consumption
renewable and non-renewable, in each life cycle phase.
- It is integrated with a CAD tool.
- The environmental assessment comprises the material flows (input and waste), as well
as an effect oriented evaluation based on ISO 14040 43.
- The English and French versions are currently under development.
OGIP
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CRB, Switzerland.
http://www.crb.ch
It enables the user to compare building projects in terms of construction and operating
costs, the grey energy of structure, the operating energy, and the environmental impacts.
Windows (commercial) in Deutsche.
Architects, designers, public authorities, constructors, and consultants.
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It contains Ecoinvent life cycle inventory data, and information on building materials, fuels
and processes.
Define the quantities of building element, based on the building element catalogue of
CRB, and the energy in use.
Outputs include costs, embodied energy, Swiss ecopoints, and effect oriented categories.
- It can be linked to other standard tools developed by CRB.
- Up to 5 buildings can be compared.
SimaPro 7.0
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ECOBILAN, France.
http://www.ecobalance.com/index_uk.html
It evaluates the environmental performance of a building.
Windows (commercial)
Authorities, researchers, and consultants.
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It consists of 309 different data modules.
For building description, the amounts of building components are defined. The data can
be entered for all the components or only for the main ones. For operation, the annual
consumptions of electricity, water, heating and etc. are required. For maintenance, the
life time of the components and assumptions are required.
Different assessment methods are available for different levels: Inventory (particulate
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and waste for wood), Classification (resource depletion, greenhouse effection and
others), and Evaluation full aggregation (Eco-indicators 95, EPS and others).
- It allows the user to select the level of details for the building description, the life cycle
stages under study as well as the environmental impact indicators.
- It can perform SA.
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